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Appeal No. 891 of 1963.
Appeal by special leave from the judgment and decree dated June 26, 1959 of the Assam High Court in Letter Patent Appeal No. 1 of 1959.
N. C. Chatterjee and D. N. Mukherjee, for the appellants.
Sarjoo Prasad and K. P. Gupta for respondents.
The Judgment of the Court was delivered by Shah, J.
Biswambar Roy predecessor interest of the appellants was Granted on February 20, 1928, a lease for ten 115 years 1335 B.S. to 1344 B.S. at an annual rental of Rs. 75/ in respect of a plot of land, part of Dag No. 3615 in the town of Silchar, District Cachar in the State of Assam.
Biswambar Roy constructed on the land, buildings, some for residential use, and others as warehouses.
On the expiry of the period of the original lease, Biswambar Roy obtained a fresh lease in respect of a part of the land for ten years Baisakh 1345 B.S. to Chaitra a 1354 B.S. at an annual rental of Rs. 70/ under an instrument dated February 22, 1938.
The respondents purchased the interest of the landlords the land and instituted on August 3, 1951 an action in the Court of the Sadar Munsiff, Silchar against Biswambar Roy for a decree for vacant possession of the land.
The suit was decreed by the Munsiff.
Biswambar Roy appealed to the Subordinate Judge, Silchar.
During the pendency of the appeal, the Non agricultural Urban Areas Tenancy Act 12 of 1955 enacted by the Assam Legislature was brought into force.
Biswambar Roy claimed protection from eviction under section 3 of Act 12 of 1955.
The Subordinate Judge held that Biswambar Roy had acquired under section 5(1)(a) of the Act the rights of a permanent tenant, since he had constructed within the period prescribed permanent structures for residential or business purposes.
He accordingly reversed the decree passed by the Trial Court and dismissed the suit.
Against that decree, an appeal was preferred to the High Court of Assam.
Deka, J., held that Biswambar Roy could not claim the protection of section 5(1) (a) of the Act, since he had let out to tenants the buildings constructed on the land.
In the view of the learned Judge, by the use of the expression "for residential or business purposes" in section 5(1)(a) it is intended that buildings constructed by the tenant should be utilized by the tenant himself for his own residence or for carrying on business and that it is not the intention of the Legislature that third persons should be protected by section 5 from eviction from those structures.
An appeal under the Letters Patent from that judgment was heard by C. P. Sinha, C. J., and Mehrotra, J.
The learned Judges differed.
Sinha, C. J., was of the view that permanent structures constructed by Biswambar Roy conformed to the descripticon "residential or business purposes" and Biswambar Roy became under Act 12 of 1955 a permanent tenant thereof and was not liable to be evicted except for non payment of rent.
With that view Mehrotra, J., did not agree.
He held that a tenant who obtains land on lease for erecting a structure thereon not for his own residential or business purposes but for letting out to others does not build "a permanent structure on the land of, the tenancy for residential or business purposes".
and may not claim protec tion under section 5(1)(a).
Since there was no majority concurring in the judgment agreeing or reversing the decree appealed from, under section 98(2) of the Code of Civil Procedure the appeal was ordered to be dismissed.
Against the decree passed by the High Court, with special leave, this appeal is preferred.
116 This Court has held that section 5 of Assam Act 12 of 1955 has retrospective operation: Refiquennessa vs Lal Bahadur Chetri & Others,(1) and the only question to be determined in this appeal is whether a tenant qualifies for protection under section 5 of the Act only after building permanent structures on the land of the tenancy if he occupies them for his own residential or business purposes.
The material part of the section reads: "(1) Notwith tanding anything in any contract or in any law for the time being in force (a) Where under the terms of a contract entered into between a landlord and his tenant whether before or after the commencement of this Act, a tenant is entitled to build, and has in pursuance of such terms actually built within the period of five years from the date of such contract, a permanent structure on the land of the tenancy for residential or business purposes, or where a tenant not being so entitled to build, has actually built any such structure on the land of the tenancy for any of the purposes aforesaid with the knowledge and acquiescence of the landlord, the tenant shall not be ejected by the landlord from the tenancy except on the ground of non payment of rent;" Protection under the first part of section 5(1)(a) may be claimed by a tenant if three conditions co exist: (i) under the terms of the contract of tenancy the tenant is entitled to build on the land of the tenancy; (ii) that pursuant to such liberty, he has actually built, within the period of five years from the date of the contract a permanent structure on the land of the tenancy; and (iii) that the permanent structure is for residential or business purposes.
The first two conditions are fulfilled in this case.
But the learned Judges of the High Court disagreed on the fulfillment of the third condition: they differed as to the true meaning of the expression" a permanent structure. . for residential or business purposes".
In the view of Sinha, C. J., under the Act the character of the structure is determinative and not personal use by the ten. ant.
Mehrotra, J., held that the permanent structure must be for residential or business purposes of the tenant.
We are unable to agree with the view taken by Mehrotra, J., because the Legislature has not, in conferring rights of permanent tenancy, either expressly or by implication enacted any such qualification as is suggested by the learned Judge.
The section merely requires that the permanent structure must be one adapted for residential or business purposes.
If the structure is not adapted to such purposes, the protection of section 5(1)(a) will not be available.
To read the expression "permanent (1) ; 117 structure on the land of the tenancy for residential or business purposes" as meaning permanent structure on the land of the tenancy constructed by the tenant for his own residential or business purposes is to add words which are not found in the section.
It was urged on behalf of the landlords that it could not have been the intention of the Legislature to confer by section 5(1)(a) protection upon sub tenants.
It was said that a sub tenant is not a tenant within the meaning of section 3(g) of the Act, and he cannot claim protection from eviction under section 5(1)(a).
In our judgment, the argument is wholly misconceived.
Protection is conferred in terms by section 5 upon the tenant of the land and not upon the tenant of the buildings constructed upon the land.
It is not necessary in this case to consider whether by virtue of the definition of "tenant" in section 3(g) of the Act which includes a person who derives his title from a tenant, a sub tenant of the land is entitled to protection of section 5(1)(a).
In the present case, the tenant of the land has claimed protection.
By merely letting the premises constructed on the land obtained by him on lease, the tenant does not cease to be in possession of the land.
The relation between the landlord and the tenant of the land continues to subsist until it is lawfully determined.
Possession of the land obtained by the tenant remains his even after he has let out the building constructed by him, and a building constructed by the tenant for use as residential or business purposes does not cease to be one for residential or business purposes, when it is let out.
We therefore agree with the view taken by Sinha, C. J., that the protection of section 5(1)(a) extends to a tenant who has constructed on the land obtained on lease permanent structures which are adapted for use for residential or business purposes and by letting out the structures the tenant does not forfeit the protection conferred by the statute.
The appeal is therefore allowed and the decree passed by the High Court vacated and the plaintiffs ' suit dismissed.
The appellants who are the representatives of the tenant will be entitled to their costs in this Court.
There will be no order as to costs in the High Court.
Appeal allowed. | Certain structures for residential and business purposes were raised by a tenant of land in the term of Silchar in Assam.
The landlord secured a decree for ejectment against the tenant.
During the pendency of the appeal the Non Agricultural Urban Areas Tenancy Act, Assam Act 12 of 1955 was brought into force.
The tenant claimed protection from eviction under section
The Subordinate Judge held that the tenant had acquired units section 5(1) (a) of the Act the right of a permanent tenant since he had constructed within the pres cribed period structures for residential or business purposes.
He accordingly dismissed the suit.
The High Court in further appeal held that the protection under section 5(1)(a) was not available to the tenant since he had let out to tenants the buildings constructed on the land.
The tenant, by special leave, appealed to this Court.
HELD:(i) The section merely requires that the permanent structure must be one adapted for residential or business purposes.
If the structure is not adapted to such purposes.
the protection of section 5 (1) (a) will not be available.
To read the expression "permanent structure on the land of the tenancy for residential or business purposes" as meaning permanent structure on the land of the tenancy constructed by the tenant for his own residential or business purposes is to add words which are not found in the section.
[116 H].
(ii) Protection is conferred in terms by section 5 upon the tenant of the land and not upon the tenant of the buildings constructed upon the land.
By letting out the structures the tenant of land does not lose the protection given by the statute.
[117 C]. |
ivil Appeal Nos. 727 and 962 74 of 1988 Appeal Under Section 35L(b) of the Central Excise and Salt Act, 1944 from the order dated 30.11.87 and 20.11.87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 2856, 1856, 1920 1931/87 A in order Nos. 775, 749 to 761/87.
Kuldeep Singh, Additional Solicitor General.
A.K. Ganguli, Mrs. Sushma Suri and K. Swami for the Appellant.
F.S. Nariman, Ravinder Narain, A.K. Verma and D.N. Misra for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These appeals arise under section 35L(b) of the Central Excises & Salt Act, 1944 (hereinafter called 'the Act ').
The respondents herein M/s. Kelvinator of India Ltd. in these appeals manufacture refrigerators.
They market these through their four exclusive wholesale dealers, namely, M/s. Gem, 658 M/s. Leonard, M/s. Expo Machinery and M/s. Tropicana.
The respondents gave one year warranty for the complete refrigerator and all parts thereof (except the light bulb and the crisper glass).
During this warranty period, they provide free repair and replacement for defects in material and workmanship under normal use and service.
This free service is available only within the municipal limits of the area served by an office of the wholesale dealer of the authorised dealer from whom the refrigerator is originally purchased.
The respondents include the cost of this one year warranty in the sale price as well as assessable value of the refrigerator.
After the free warranty period of one year is over, the respondents offer a four year service contract only for the sealed system or parts thereof.
This contract is not free.
It is on payment basis.
Charges for it during the material period (10.4.81 to 30.6.86), in Civil Appeals Nos.
962 75 of 1988, varied from Rs. 300 to Rs.450 per refrigerator.
It is a fact that these four dealers enter into this contract with the respondents.
The final consumer in turn enters into the service contract with the dealer from whom he buys his refrigerator.
The service is rendered by the respondents and the entire contract money accrues to them.
It is on evidence that during the material period the four dealers referred to hereinbefore entered into service contract in respect of a total of 91% of their purchases.
The remaining 9% did not enter into such contract.
This is optional.
The Assistant Collector by his order dated 18th August, 1986 held that four year service charge is includible in the value of the Refrigerator for the purpose of assessment of central excise duty under section 4 of the Act.
The Assistant Collector further held that for all intents and purposes this charge was not optional as it was not exercised only in respect of 9% of the sales.
The Assistant Collector relied on the decision of this Court in Union of India and others etc.
vs Bombay Tyre International Ltd. etc.
; , where it was held that after sale service charges could not be deducted from the assessable value.
The Assistant Collector confirmed the demands totalling Rs.17,40,68,326.32 against the respondents (in Civil Appeals No. 962 74 of 1988) and Rs.7,07,535 (in Civil Appeal No. 727 of 1988).
The respondents herein filed an appeal before the Appellate Collector.
The Appellate Collector upheld the decision of the Assistant Collector.
There was an appeal to the Tribunal and the Tribunal held that the optional service charge during the second and third year after the expiry of the first year warranty period was not includible in the assessable value.
The Tribunal allowed the appeals of the assessee with consequential relief.
Hence these appeals come to this Court.
659 The point involved in these appeals is whether the four year service contract charge is includible in the value of the refrigerators for the purpose of assessment of Central Excise Duty under section 4 of the Act.
It was found as a fact by the Tribunal that after the free warranty period of one year is over, the respondent herein offer a four year service contract only for the sealed system or parts thereof.
This contract is not free.
It is on payment basis.
The contract is not compulsory and the four dealers entered into service contract in respect of 91% of their purchase.
They did not make the contract for the remaining 9%.
It is also not necessary that the contract should be made right at the time of purchase of the refrigerator from the respondents.
In fact it was found as a fact that some time contract was made only in less than 10% of the sales.
For the remaining 81% of the purchases, the dealers took time from one week to over six months from the date of purchase.
It was explained by the respondents that depending upon the demand pattern in a particular area, the dealer purchased about 10% of the refrigerators straightaway with the service contract; for the remaining purchases, he exercised the option later, as and when the dealer anticipated further demand from his customers.
The Tribunal on an analysis of the evidence came to the conclusion that it was after sale service and it was optional.
Therefore, such service charges were not includible in the assessable value of the respondents herein.
The principle under which these will be includible has been laid down in Union of India and others.
vs Bombay Tyre International Ltd. (supra), where Pathak, J., as the learned Chief Justice then was, inter alia, observed as follow: ". expenses incurred by the assessee upto the date of delivery on account of storage charges, outward handling charges, interest on inventories (stocks carried by the manufacturer after clearance), charges for other services after delivery to the buyer, namely, after sales service and marketing and selling organisation expenses including advertisement expenses cannot be deducted.
It will be noted that advertisement expenses, marketing and selling or organisation expenses and after sales service promote the marketability of the article and enter into its value in the trade.
Where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses incurred by the assessee upto the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted.
660 But the assessee will be entitled to a deduction on account A of the cost of transportation of the excisable article from the factory gate to the place or places where it is sold.
The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery.
" This aspect was later clarified by this Court in Assistant Collector of Central Excise and others vs Madras Rubber Factory Ltd. and others, , where Bhagwati C.J. at page 562 of the report observed as follows.
"Interest on finished goods from the date of the stocks are cleared till the date of the sale was disallowed by the Assistant Collector, Kottayam.
This head has again been urged for our consideration as a proper deduction for determination of the assessable value.
As quoted in our judgment in Union of India and Ors.
vs Bombay Tyres International Ltd. (supra), we have held that expenses incurred on account of several factors which have contributed to its value upto the date of sale which apparently would be the date of delivery at the factory gate are liable to be included.
The interest on the finished goods until the goods are sold and delivered at the factory gate would therefore necessarily, according to the judgment in Bombay Tyres International case (supra) have to be included but interest on finished goods from the date of delivery at the factory gate upto the date of delivery from the sales depot would be an expense incurred after the date of removal from the factory gate and it would therefore, according to the judgment in Bombay Tyres International case (supra) not be liable to be included since it would add to the value of the goods after the date of removal from the factory gate.
We would therefore have to allow the claim of MRF Ltd. as above.
" It was mentioned before us by the learned Additional Solicitor General that this judgment is under review.
The Tribunal in its judgment herein has observed as follows: "We have given enough facts in paragraph 2 above to show that the four year service contract charge in the present was 661 not compulsory one.
As to why the appellants ' buyers chose not to enter into such contract only for about 9% of the purchases and not more is a matter between the manufacturer and his customers.
The percentages may look small but the statement of sales filed before us for the five year period (1981 86) shows that the number of Refrigerators in respect of which the option was not exercised was in thousands, ranging from over 18,000 to over 39,000 per year.
We find no force in the department 's pleading that the service charge, for all intents and purposes, was a compulsory one.
As to what machinery the appellants devised for extending this service is not material.
If any customer did not like to have the service, there was no compulsion on him to go in for it.
That is the important thing.
Once we reach the conclusion that the post warranty service activity could not be subjected to excise, it ceases to be material that 91% of the customers had opted for the service contract.
The ordinary or normal price referred to in section 4(1)(a) can take in the costs upto the stage of factory gate and not beyond as held by the Hon 'ble Supreme Court.
" The Tribunal also observed that the respondents herein offered the four years service by a stamped endorsement on their sale invoice itself, it did not mean that the subsequent exercise of option by the buyer related back to the date of purchase itself.
It was also found that there was no evidence to conclude that the service contract was a facade to split the true value of refrigerators into taxable and nontaxable components.
In that view of the matter, the Tribunal set aside the order of the Collector of Central Excise (Appeals) and allowed the appeals.
The contract for four years warranty service was optional, which was entered into later on.
This is clearly after sale facility and cannot be includible in the assessable value of the refrigerators.
In the aforesaid view of the matter, the Tribunal was right in the view it took.
These appeals fail and are accordingly dismissed.
G.N. Appeals dismissed. | The Respondents, manufacturers of refrigerators, give one year warranty for the complete refrigerator and all parts thereof.
During this warranty period, they provide free repair and replacement for defects in material and workmanship under normal use and service.
They include the cost of this one year warranty in the sale price as well as assessable value of the refrigerator.
After the free warranty period of one year, the respondents offer a four year service contract only for the sealed system or parts thereof.
This contract is on payment which may vary from Rs.300 and Rs.400 per refrigerator.
The dealers enter into contract with the Respondents, and the consumer in turn enters into contract with the dealer from whom he buys his refrigerator.
The service is rendered by the Respondents and the entire contract money accrues to them.
Though the contract is optional, 91% of Customers did enter into this contract, and only 9% did not.
The Assistant Collector held that the four year service charge is includible in the value of the refrigerator for the purpose of Central Excise dub under section 4 of the Act.
The Appellate Collector upheld the said decision.
On appeal the Tribunal held that the said optional service charge was not includible in the assessable value.
These appeals by Revenue under Section 35L(b) of the Act are against the Tribunal 's decision.
Dismissing the appeals, this Court, ^ HELD: 1.
The contract for four years warranty service was optional which was entered into later on.
This is clearly after sale 657 facility and cannot be includible in the assessable value of the refrigerator.
[661G] 1.2 The Tribunal was right in the view it took that the optional service charge after the expiry of the first year warranty period was not includible in the assessable value.
It rightly observed that if any consumer did not like to have the service, there was no compulsion on him to go in for it and once the conclusion is reached that post warranty service activity could not be subjected to excise, it ceases to be material that 91% of the customers had opted for the service contract.
The Tribunal also observed that the respondents offered the four year service by a stamped endorsement on their sale invoice itself, but it did not mean that the subsequent exercise of option by the buyer related back to the date of purchase itself and that there was no evidence to conclude that the service contract was a facade to split the true value of refrigerators into taxable and non taxable components.
[658H;661D F] Union of India and Others etc.
vs Bombay Tyre Interna tional Ltd.; , and Assistant Collector of Central Excise and others vs Madras Rubber Factory Ltd. and others, , referred to. |
No. 47 of 1966.
Petition.under article 32 of the Constitution of India for the enforcemont of fundamental rights.
The petitioner appeared in person.
210 Niren De, Additional Solicitor General, N. section Bindra, R. H. Dhebar and B.R.G.K. Achar, for the respondent.
R. V. section Matti, for the intervener.
The Judgment of the Court was delivered by Sarkar, CJ.
The petitioner, Puran Lal Lakhanpal, was arrested and detained under cl.
(b) of sub r.
(1) of Rule 301 of the Defence of India Rules.
1962 by an order passed on December 10, 1965 and directed to be detained in Central Jail, Tehar, New Delhi.
The order stated that: "WHEREAS the Central Government is satisfied that with a view to preventing Shri P.L. Lakhanpal.
son of late Shri Diwan Chand Sharma. . from acting in a manner prejudicial to the Defence of India and Civil Defence, public safety and the maintenance of public order, it is necessary that he should be detained; NOW, THEREFORE. . . the Central Government hereby directs that the said Shri P. L. Lakhanpal be detained.
" He has moved this Court under article 32 of the Constitution by a petition presented on December 24, 1965 for a writ of habeas corpus directing his release.
He challenges the legality of the detention order on various grounds which we now proceed to consider.
The first ground is that r. 30(1)(b) is ultra vires section 3(2)(15)(1) of the Defence of India Act under which the Rules were made.
Sub s.(1) of section 3 contains the general power to make rules for certain purposes.
Sub section (2) states that the rules made may provide for and many empower any authority to make orders providing for all or any of the following matters, namely: "(15) notwithstanding anything in any other law for the time being in force. . . . (i) the apprehension and detention in custody of any person whom the authority empowered. . suspects, on grounds appearing to that authority to be reasonable . . . . acting, being about to act or being likely to act in a manner prejudicial to the defence of India and civil defence, the security of the State, the public safety or interest,the maintenance of public order. . or with respect to whom that authority is satisfied that his apprehension and detention are necessary for the purpose of preventing him from acting in any such prejudicial manner." 211 Rule 30(1)(b) is in these terms: "The Central Government. . . if it is satisfied with respect to any particular person that with a view to preventing him from acting in any manner prejudicial to the defence of India and civil defence, the public safety, the maintenance of public order. . . may make an order (b) directing that he be detained.
" It will be noticed that the rule does not say that the satisfaction mentioned in it shall be on grounds appearing to the authority concerned to be reasonable.
It is said that by omitting these words the rule has gone outside the section which mentions them, and is, therefore, ultra vires.
This contention is untenable.
It overlooks the fact that the latter part of the section states that the rules made under it may also provide for the apprehension and detention of a person "with respect to whom that authority is satisfied that his apprehension and detention are necessary" for certain purposes; this part does not contain any requirement as to satisfaction on reasonable grounds.
This part of the section is independent of the earlier part under which the apprehension and detention can be directed only when the authority suspects on certain grounds appearing to it to be reasonable that a person is about to act in a certain manner.
It is of some significance to point out that the second part of the section is preceded by the word 'or '.
That puts it beyond doubt that the rules made under it may provide for detention in two alternative cases, for the first of which only it is necessary that the authority should entertain a suspicion on grounds appearing to it to be reasonable.
That requirement is absent in the case of a rule made under the second part of the section.
Rule 30(1)(b) cannot be said to be ultra vires the section for the reason that it does not state that the satisfaction of the authority making the order of detention has to be on grounds appearing to it to be reasonable.
The rule requires only that the detaining authority must be satisfied that the detention is necessary for the purposes mentioned and that is what the latter part of the section under which it was made also says.
The rule has clearly been made in terms of the section authorising it.
It was next said that the Proclamation of Emergency made by the President under article 352 of the Constitution which prevented the Act from being illegal, was not in terms of the article as it did not state that the President was satisfied that a grave emergency existed.
It is true that the Proclamation did not do that.
It stated: " In exercise of the powers conferred by clause (1) of article 352 of the Constitution, I Sarvapalli Radhakrishnan, President of India, by this Proclamation declare that a grave emergency exists whereby the security of India is threatened by external aggression.
" 212 We, however, find nothing in the Article which requires the Proclamation to state the satisfaction of the President about the emergency.
Article 352(1) reads, "If the President is satisfied that a grave emergency exists whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance, he may, by Proclamation, make a declaration to that effect.
" The Article requires only a declaration of emergency threatening the security of India by one of the causes mentioned.
The words "to that effect" can have no other meaning.
The power to make the declaration can no doubt be exercised only when the President is satisfied about the emergency, but we do not see that the Article requires the condition precedent for the exercise of the power, that is, the President 's satisfaction, to be stated in the declaration.
The declaration shows that the President must have satisfied himself about the existence of the emergency for in these matters the rule that official acts are presumed to have been properly performed applies and there is nothing proved by the petitioner to displace that presumption.
We were referred to certain other provisions, viz., article 311(2)(c) of the Constitution and r. 30(1)(b) of the Rules and it was contended that these provisions require the satisfaction to be stated.
It is unnecessary to decide whether they so require.
Even if they did, the requirement of the statement of the President 's satisfaction in the present case has to be decided on the terms of article 352 alone.
We have said that this Article does not contain any such requirement.
It is of interest to point out here that the petitioner stated in his petition that he extended his full support to the Government on the Proclamation of Emergency.
Obviously he could not have done so if he had any doubt about the legality of the Proclamation.
Then it was said that the Proclamation should have stated the direction from which the external aggression which it mentioned was apprehended.
We find nothing in the Article to require the Proclamation to state this.
The Proclamation was issued on October 26, 1962 when, it is well known, India 's integrity was threatened by China.
It was also stated that the continuance of Emergency which was declared over three years ago is a fraud on the Constitution.
We were told that the President in his address to the Parliament in February this year did not state that the Emergency continued to exist.
The President 's address has not been produced, and we do not know what it contained.
However that may be, article 352 itself by cl.
(2) provides that a Proclamation issued under cl.
(1) may be revoked by a subsequent Proclamation and shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament.
This clause also states that the Proclamation shall be laid before each House of Parliament.
It has not 213 been stated that the Houses of Parliament did not approve of the Proclamation within the period of two months.
It would appear, therefore, that the only way a Proclamation ceases to have effect is by one of the events mentioned in this clause.
None of them has happened.
Nothing contained in an address by the President to the Houses of Parliament can operate to terminate the Proclamation.
In this connection it was also said that 'external aggression ' means armed aggression and as for some time past there was no armed, aggression against the territory of India, the continuance of the Proclamation was unjustified.
This contention must also fail, on the ground which we have just mentioned.
Another challenge to the legality of the detention was that the petitioner had not been allowed to make any representation against his detention.
Our attention was drawn in this connection to section 3(2) (15)(iv) of the Act and r. 30 A of the Rules and also to r. 23, of the Defence of India (Delhi Detenues) Rules, 1964.
The two first mentioned provisions do not, in our opinion, give a right to make a representation.
Their effect is to provide a review of the detention order by the authorities and in the manner mentioned.
The last one states that a detenue will be allowed to interview a legal practitioner for the purpose of drafting his representation against his detention.
It has not been stated in the petition that the petitioner was pre vented from making any representation or denied the opportunity to consult a legal practitioner.
All hat is said is that he had not been furnished particulars of his writing s and materials on which the satisfaction of the Central Government mentioned in the order was based and that had prevented him from making a representation to the Government against his detention.
This contention seems to us unwarranted.
There is nothing to show that the detention order had been based on petitioner 's writings, nor has our attention been drawn to any provision which requires the detaining authority to supply the materials on which they had formed their satisfaction about the necessity of the detention.
Then it was said that the order of detention violated section 44 of the Act and section 3(2)(4)(b), (6), (7)(a)(b)(c) and (d) and rr. 41, 42, 44, 45 and 46 of the Rules.
The substance of the contention is that the petitioner was the editor of and ran a newspaper and that action against him could only be taken under the sections and rules earlier mentioned and not under r. 30(1)(b).
This contention seems to us to be entirely groundless.
The provisions referred to no doubt deal with newspapers and the manner of controlling them but they in no way lead to the conclusion that a newspaper editor may not, if the occasion arises, be detained under r. 30(1)(b).
The fact that newspapers and men connected with them may be dealt with in a certain manner does not prevent detention of such persons under r. 30(1)(b).
It was also said that r. 30(1)(b) requires that the part of India which is to be prejudicially affected by the acts of the detenue has to be mentioned in the order.
This is an idle contention.
The 214 rule no doubt says that the detention may be ordered to prevent a person from acting in a manner prejudicial to the maintenance of peaceful conditions in any part of India, but it also says that the detention can be ordered for preventing a person from acting in a manner prejudicial to the defence of India, civil defence and public safety and maintenance of public order with regard to which there is no requirement provided that they should be confined to any part of India or that part should be mentioned in the order of detention.
The order in this case was made on these grounds.
The petition furnishes no material for saying that the terms of section 44 have been violated.
There is nothing to show that the detention interfered with the petitioner 's avocation in life in a manner not justified by that section.
The last ground taken was that the detention order was mala fide because the Home Minister had not sworn an affidavit to say that he was satisfied about the necessity for the detention.
There is a bald allegation in the petition that the detaining authority had not applied its mind to the matter before making the order of detention.
This part of the petition was verified as true to the petitioner 's knowledge.
This verification was plainly false and, therefore, the allegation in the petition required no answer.
However, that may be, a Deputy Secretary to the Home Ministry of the Government of India has sworn an affidavit stating as true to his knowledge that the materials in connection with the activities of the petitioner were placed before the Union Home Minister and, on a consideration of those materials, the Minister was satisfied that the detention order was necessary.
The result is that this petition fails and it is accordingly dismissed.
Petition dismissed. | The petitioner, the editor of a newspaper, was detained under r. 30(1)(b) of the Defence of India Rules, 1962.
He filed a petition under article 32 of the Constitution for a writ of habeas corpus challenging the legality of the detention order on various grounds.
Dismissing the petition, HELD:Rule 30 (1) (b) cannot be said to be ultra vires of section 3 (2) (15)(i) of the Defence of India Act for the reason that it does not state that the satisfaction of the authority making the order of detention has to be on grounds appearing to it to be reasonable.
The rule requires only that the detaining authority must be satisfied that the detention is necessary for the purposes mentioned and that is what the latter part of the section under which it was made also says.
This part does not contain any requirement as to satisfaction on reasonable grounds.
The rule has clearly been made in terms of the section authorising it.
[211 F] Article 352 of the Constitution does not require the proclamation to state the satisfaction of the President about the Emergency.
The Article requires only a declaration of emergency threatening the security of India by one of the causes mentioned.
The words "to that effect" can have no other meaning.
A proclamation ceases to have effect only by one of the events mentioned in cl. 2 of article 352 of the Constitution.[212 C] Section 3(2)(15)(iv) of the Defence of India Act and r. 30 A of the Defence of India Rules, does not give a right to make a representation.
Their effect is to provide a review of the detention order by the authorities and in the manner mentioned.
Rule 23 of the Defence of India (Delhi Detenus) Rules, 1964, states that a detente will be allowed to interview a legal practitioner for the Purpose of drafting his representation against his detention.
[213 C D].
The fact that newspapers and men connected with them may be dealt with under other provisions of the Art and Rules does not prevent detention of such persons under r. 30(1)(b) of the Defence of India Rules.
[213 H] The order need not mention the part of India which was to be Prejudicially affected by the acts of the detenue. |
iminal Appeal No. 113 of 1965.
Appeal from the judgment and order dated October 26, 1964 of the Allahabad High Court in Criminal Revision No. 803 of 1963.
J. P. Goyal, for the appellants.
O. P. Rana and Atiqur Rehman, for respondent No.1.
section K. Mehta and K. L. Mehta, for respondent No., 2.
B. R. L. lyengar and B. R. G. K. Achar, for the Intervener.
The Judgment of the Court was delivered by Mudholkar, J.
The only point which falls to be decided in this appeal by certificate granted by the High Court at Allahabad is whether the District Judge has jurisdiction under section 24 of the Code of Civil Procedure to transfer a reference made by a Magistrate to a particular civil court under section 146 of the Code of Criminal Procedure to another civil court.
It arises this way.
Proceedings under section 145, Cr.
P.C. were initiated by a Magistrate on the basis of a report of a police officer to the effect that a dispute likely to cause a breach of the peace exists concerning a plot of land situate within the jurisdiction of the Magistrate between the parties mentioned in the report and praying for appropriate action under section 145 of the Code of Criminal Procedure.
The learned Magistrate upon being satisfied about the possibility of a breach of the peace made a preliminary order under section 145, Cr. P.C., attached the property to which the dispute related and called upon the parties to adduce evidence in respect of their respective claims.
In due course he recorded the evidence but he was unable to make up his mind as to which of the parties was in possession on the date of the preliminary order and within two months thereof.
He, therefore, referred the case under section 146(1) of the Cr. P. C. to a civil court for decision, as to which of the parties was in possession at the material point of time and in the meanwhile directed that the attachment of the Property shall continue.
The reference went to the court of the Munson within whose territorial jurisdiction the property was situate.
But thereafter one of the parties Brij Gopal Binani, respondent No. 2 before us, made an application to the District Judge under section 24, C.P.C. for transfer of the case to some other.
court.
The, ground given was that in the execution case out of which proceedings under section 145, Cr.
P.C. had arisen, the same Munsiff had.
made an order against him depriving him of costs.
The Munsiff having no objection to the transfer the District Judge ' transferred the case to the court of another Munsiff.
The opposite parties, that.
is, the appellants before us Ram Chandra Aggarwal and Kedar Prasad Aggarwal acquiesced in the order of transfer and did not raise any question as to the jurisdiction of the, transferee court to hear and decide the reference.
Eventually evidence was led by both sides ' and a finding given by the transferee court.
This finding was in favour 395 of the second respondent.
After receiving the finding the I Magistrate heard the parties and held that it was the second respondent who was in possession at the relevant date and passed an order under section 145(6), Cr.
P.C. pursuant thereto.
A revision application was preferred by the appellants before the court of Sessions in which the objection was taken for the first time that the decision of the civil court was a nullity because it had no territorial jurisdic tion over the subject matter of the dispute.
It was further contended that the District Judge had no jurisdiction to transfer the case and that consequently the ultimate order made by the learned Magistrate was a nullity.
The learned Additional Sessions Judge who heard the revision application rejected these contentions on the ground that they were not raised earlier.
The appellants then took the matter to the High Court in revision.
The appellants rested their revision application on the sole ground that section 24, C.P.C. was not available in respect of a reference under section 146(1) Cr.
P.C. and that, therefore, the proceedings subsequent to the transfer of the reference from the court of one Munsiff to that of another are a nullity.
The High Court permitted the point to be urged.
The attack was based upon two grounds: that the reference under section 146(1), Cr.
P.C. was to a persona designata and that the provisions of section 24, C.P.C. were not available with respect to it.
The second ground was that the proceeding before the civil court was not a civil proceeding within the meaning of section 141, C.P.C.
The High Court negatived both the grounds on which the contention was based.
On behalf of the appellants Mr. Goyal has reiterated both the contentions.
In fairness to Mr. Goyal it must be said that his attack on the order of the District Judge transferring the case under section 24, C.P.C. was based more on the ground that the reference under section 146(1) Cr.
P.C. is not a civil proceeding than on the ground that the reference was to a persona designata.
However, as he did not wish to abandon the other point we must deal with it even though Mr. B. R. L. Iyengar who appears for the State conceded that a reference under section 146(1) is to a constituted court and not to a persona designata.
In BalakrishnaUdayar vs Vasudeva Aiyar(1) Lord Atkinson has pointed out teh difference between a persona designata and a legal tribunal.
The difference is in this that the "determinations of a persona designata are not to be treated as judgments of a legal tribunal".
In the central Talkies Ltd. vs Dwarka Prasad(2) this 'Court has accepted the meaning given to the expression persona designata in Osborn 's Concise Law Dictionary.
4th edn.
p. 263 as eta person who is pointed out or described as an individual, as opposed to a person ascertained as a member of a class, or as filling a particular characters Section 146(1) Cr.
P.C. empowers a Magis 396 trate to refer the question as to whether any, and if so, which of the parties was in possession of the subject matter of dispute at.
the relevant point of time to a civil court of competent jurisdiction.
The power is not to refer the matter to the presiding Judge of a particular civil court but to a court.
When a special or local law provides for an adjudication to be made by a constituted court that is, by a court not created by a special or local law but to an existing court it in fact enlarges the ordinary jurisdiction of such a court.
Thus where a special or local statute refers to a constituted court as a court and does not refer to the presiding officer of that court the reference cannot be said to be to a persona designata.
This question is well settled.
It is, therefore, unnecessary to say anything more on this part of the case except that cases dealing with the point have been well summarised in the recent decision in Chatur Mohan vs Ram Behari Dixit.(1).
Now, as to the argument based on the ground that the pro ceeding before the civil court is not a civil proceeding, Mr. Goyal 's contention is that since the proceeding before the criminal court under section 145 is a criminal proceeding any matter arising out of it, including a reference to a civil court, does not lose its initial character of a criminal proceeding.
In support of his contention he has placed strong reliance upon the observations of Jagdish Sahai J., in Sri Sheonath Prasad vs City Magistrate, Varanasi.
(2) In that case the learned Judge was called upon to consider the meaning of the expression "civil court of competent jurisdiction" occurring in section 146(1) of the Code of Criminal Procedure.
It was contended before him that the competency of the court is to be determined not merely with respect to the territorial jurisdiction of the court but also with respect to its pecuniary jurisdiction.
The question arose because it was contended before him that the finding on a question of possession was recorded by a civil court which though it had territorial jurisdiction over the subject matter of the dispute the value of the subject matter was in excess of the pecuniary jurisdiction of the court.
In the course of his judgment the learned Judge has observed: "that a proceeding even on reference made to a civil court retains its old moorings and does not change its character from a criminal proceeding to a civil proceeding and does not become a proceeding in the suit.
" Then he went on to point out that the criminal court still retains its jurisdiction because it could withdraw the reference from the civil court at any.
time and also because the ultimate decision with the respect to the dispute between the parties was to be made by the Magistrate and not by the civil court.
All this, according to the learned Judge, would show that the proceeding even: before the civil court would not be a civil proceeding.and the idea of pecuniary jurisdiction of a court being foreign to the Code of Criminal Procedure it was not necessary to (1) 1964 All.
L. J. 256.
(2) A.I.R. 1959 All.
467. 397 ascertain whether the court to which a reference was made under section 146(1) Cr.
P.C. had pecuniary jurisdiction over the subject matter of the dispute or not.
This ' decision ignores the vast 'body of authority which is to the effect that when a legal right is in dispute and the ordinary courts of the country are seized of such dispute the courts are governed by the ordinary rules of procedure applicable to them.
Two of the decisions are Adaikappa Chettiar vs Chandrasekharca Theyar(1) and Maung Ba Thaw vs Ma Pin(1) and also a decision of this Court which proceeds upon the same view.
Thus in South Asia Industries (P) Ltd. vs section B. Sarup Singh(1) it was held that where a statute confers a right of appeal from the order of a tribunal to the High Court without any limitation thereon 'the appeal to the High Court will be regulated by the practice and procedure obtaining in the High Court.
We would also like to refer to the decision of this Court in Naravan Row vs Ishwarlal(1) in which it was held that there is no reason for restricting the expression "civil proceeding" only to those proceedings which arise out of civil suits or proceedings which are tried as civil suits.
Though this decision was concerned with the meaning of the words "civil proceeding" used in article 133(1)(c) of the Constitution the reasoning behind it sufficiently repels the extreme contention of Mr., Goyal that a proceeding stemming from a criminal matter must always bear the stamp of a criminal proceeding.
Then, according to Mr. Goyal, when a magistrate refers a question as to which: party was in possession at the relevant date what be does is to delegate that duty, initially resting upon him, to the civil court.
In performing that duty the civil court would, therefore, be acting as a criminal court just as the magistrate would be doing where he has to decide the question himself.
The two Privy Council decisions we have referred to sufficiently answer this contention.
No doubt, the Magistrate, while discharging his function under the Code of Criminal Procedure under section 145(1), would be exercising his criminal jurisdiction because that is the only kind of jurisdiction which the Code confers upon the magistrates but when the magistrate refers the question to a civil court he does not confer a part of his criminal jurisdiction upon the civil court.
There is no provision under which he can clothe a. court or a tribunal which is not specified in the Criminal Procedure Code with criminal jurisdiction We are, therefore, unable to accept the contention of Goyal.
Mr. Iyengar tried to put the matter in a somewhat different way.
In the first place.
according to him , if we hold that the proceeding before the civil court is a, civil proceeding then all the rules of procedure contained in the Civil Procedure Code,.
including those relating to appeals or revision would apply to the proceeding.
(1) 74 I.A. 264.
(2) 61 I.A. 158.
(3)[1966].2 S.C.R. 756.
(4) A.I.R. 1956 S.C.1818 398 he points out, would be contrary to the provisions of section 146(1 P) of Code of Criminal Procedure which bar an appeal,review or revision from any finding of the civil court.
From this he wants us to infer that the proceeding does not take the character of a civil proceeding even though it takes place before a civil court.
We are not, impressed by this argument.
If sub section
(1 D) had: , not been enacted (and this is really a new provision) an appeal or revision application would have been maintainable.
Now that it is there, the only effect of it is that neither an appeal nor a revision is any longer maintainable.
This consequence ensues because of the express provision and not because the proceeding, before the civil court is not a civil proceeding.
The next contention and it was the one pressed strenuously by him was that a proceeding upon a reference under section 146(1) entertained by a civil court not being an original proceeding the provisions of section 141, C.P.C. are not attracted and that, therefore.
those provisions of the Civil Procedure Code which relate to suits are not applicable to a proceeding undertaken by a civil court upon a reference to it under section 146(1) of the Code of Criminal Procedure.
A number of cases dealing with this point were brought to our notice either by him or by Mr. Goyal.
It seems to us, however, that those cases are not relevant for deciding the point which is before us.
In passing, however, we may mention the fact that a full bench of the Allahabad High Court has held in Maha Ram vs Harbans(1) that the civil court to which an issue on the quest ion of proprietary rights has been submitted by a revenue court under section 271 of the Agra Tenancy Act, 1926 has jurisdiction to refer,the issue to arbitration under paragraph I of Schedule II of the C.P C.
This decision is based upon the view that by virtue of section 141, C.P.C. the provisions relating to arbitration contained in the second schedule to the Code of Civil Procedure before the repeal of that schedule applied to a proceeding of this kind.
Similarly recently this Court has held in Munshi Ram vs Banwarilal(2) that under section 41 of the Arbitration Act and also under section 141, C.P.C. it was competent to the court before which an award made by an arbitration tribunal is filed for passing a decree in terms thereof to permit Parties to compromise their dispute under O. XXIII, r. 3, C.P.C.
Though there is no discussion, this Court has acted upon the view that the expression" 'civil proceeding" in section 141 is not necessarily confined to an original proceeding like a suit or an application for appointment of a gurdian etc.
but that it applies also to a proceeding which is not an original proceeding.
Thus, though we say that it is not an original to consider in this case whether.
the proceeding before the civil court is a civil proceeding as contemplated by section 141 or not there is good authority for saying that it is a civil Proceeding.
All that we are concerned with in this case is whether (1) I.L.R. [1941] All.193 (2) I.L.R. 1962 S.C.903.
399 the provisions.
of section 24(1)(b) of the Code of Civil Procedure are available with respect to a proceeding arising out of a reference ,,under section 146(1), Cr.
The relevant portion of section 24 may, therefore be set out.
It reads thus: "On the application of any of the parties and after notice to the parties and after hearing such of them as desired to be heard, or of its own motion without such notice, the High Court or the District Court may at any stage (a) (b) withdraw any suit, appeal or other proceeding pending in any Court subordinate to it, and (ii) transfer the same for trial or disposal to any Court subordinate to it and competent to try or dispose of the same; or III. . . . .
It plainly speaks of "other proceeding pending in any court subordinate to it" and not only to the civil proceeding pending before a subordinate court.
The decisions of the Privy Council and one decision of this Court which we have earlier quoted would warrant the application of the provisions of the Code of Civil Procedure generally to a proceeding before a civil court arising out of a reference to it by a Magistrate under section 146(1) of the Code of Crimi nal Procedure.
The expression "proceeding" used in this section is not a term of art which has acquired a definite meaning.
What its meaning is when it occurs in a particular statute or a provision of a statute will have to be ascertained by looking at the relevant statute.
Looking to the context in which the word has been used in section 24(1)(b) of the Code of Civil Procedure it would appear to us to be something going on in a court in relation to the adjudication of a dispute other than a suit or an appeal.
Bearing in mind that the term "proceeding" indicates something in which business.
is conducted according to a prescribed mode it would be only right to give it, as used in the aforesaid provision, a comprehensive meaning so as to include within it all matters coming up for judicial adjudication and not to confine it to a civil proceeding alone.
In a recent case Kochadai Naidu vs Nagavasami Naidu(1) Ramachandra lyer J., (as he then was) was called upon to consider the very question which arises before us.
The learned Judge held (1) I.L.R. 400 that a proceeding before a civil court arising out of a reference to it under section 146(1), Cr.
P.C. can be transferred by the High Court or District Court under section 24, C.P.C. because it is in any case a proceedings.
He has also considered this question from the angle of the nature of the proceeding and expressed the view that the proceeding was a civil proceeding to which the procedure for suits could, with the aid of section 141, C.P.C. be applied.
If indeed the term "proceeding" in section 24 is not confined to a civil proceeding there is no need whatsoever of taking the aid of section 141, C.P.C.
Upon this view we dismiss the appeal.
Appeal dismissed. | Under section 146(1) Criminal Procedure Code, a Magistrate referred to a Civil Court of competent jurisdiction the question as to which of the parties was, at the relevant point of time, in possession of the subject matter of dispute in a proceeding under section 145 Cr.
Under section 24, Civil Procedure Code, the District Judge transferred the reference to another Civil Court.
It was contended that the District Judge acted without jurisdiction because (i) the reference was to a persona designata, and (ii) the provisions of C.P.C. did not apply to the proceeding as it was not a proceeding in a court of Civil jurisdiction within the meaning of section 141, C.P.C. HELD: (i) Where a special or local statute refers to a constituted court as a court and does not refer to the presiding officer of the court, the reference cannot be said to be to a persona designata.
The power under.s. 146(1) is not to refer the matter to the presiding Judge of a Civil Court, but to a court.
[396A C].
(ii)The provisions of the Civil Procedure Code apply generally to a proceeding before a civil court arising out of a reference made by,,& Magistrate under section 146(1) Cr.
P.C. F399 E F] Adaikappa Chettiar vs Chandrasekhara Thevar, 74 I.A. 264, Mamg Ba Thaw vs Ma Pin, 61 I.A. 158 and South Asia Industries (P) Ltd. vs section B. Sarup Singh, [1965] 2 S.C.R. 756 applied.
Section 24 C.P.C. refers to "other proceeding in any court sub ordinate to it" and not to a civil proceeding pending before a subordinate court.
The term "proceeding" is comprehensive enough to include all matters coming up for judicial adjudication and is not confined to civil proceedings alone, and therefore, there is no need to invoke section 141, V.P.C. [399 F H] Obiter: The proceeding before the civil court is a civil proceeding as contemplated by section 141 C.P.C. [398 F H] A proceeding stemming from a criminal matter does not always bear the stamp of a criminal proceeding.
[397 D E] Sri Sheonath Prasad vs City Magistrate, Varanasi, A.I.R. 1959 All. 467, disapproved.
The Magistrate when he refers the question to a civil court, does not confer a part of his criminal jurisdiction upon the civil court.
Under section 146(1D), Cr.P.C., neither an appeal nor a revision lies against the finding of the civil court in the reference, because of the express provision and not because the Proceeding before the civil court is not a civil proceeding.
[398 A C] 394 |
iminal Appeal No. 69 of 1966.
Appeal by special leave from the judgment and order dated December 9, 1965 of the Madras High Court in Criminal Revision Case No. 1261 of 1964 and Criminal Revision Petition No. 1235 of 1964.
R. Thiagarajan, for the appellants.
Purshottam Trikamdas and T. V. R. Tatachari, for the respondent.
374 The Judgment of the Court was delivered by Ramaswami, J.
The 2nd petitioner Kuppuswami lodged a a complaint with Yercaud Police on October 12, 1963 alleging that the respondent, M. section P. Rajesh and other persons had formed an unlawful assembly and committed offences of house trespass, mischief and causing hurt at 10 p.m. on October 11, 1963.
The complaint was the subject matter of investigation by the police who did not present a charge sheet against respondent, M. section P. Rajesh but filed a charge sheet against 4 other persons under sections 323, 325 and 448, Indian Penal Code in C.C. No. 3097/1963 in the Court of Sub Magistrat 3, Salem.
The case was tried by the Sub Magistrate who ultimately acquitted all the accused by his judgment dated December 13, 1963.
In the course of evidence, at that trial the 1st petitioner was examined as P.W. 1 and 2nd petitioner as P.W. 2 and it is alleged by the respondent that the petitioner gave false evidence to the effect that the respondent was also among the trespassers and assailants and that he was armed with a gun which another accused took from him.
After the conclusion of the trial the respondent filed a petition in the court of the Magistrate under section 476(1), Criminal Procedure Code alleging that on October 11, 1962 he along with certain other Directors had attended a meeting of the Board of Directors of Chembra Peak Estate Ltd. from 4.30 p.m. to 5.15 p.m. at Bangalore and that he was not at Yercaud on October 11, 1963, and prayed for the prosecution of the petitioners for giving false evidence under section 193, Indian Penal Code.
The respondent produced a, copy of the Draft Minutes of the Board meeting and also cited certain witnesses in support of his case.
After considering the matter, the Sub Magistrate of Salem held that he was satisfied that the respondent could not have been present at the alleged occurrence on October 11, 1963 at Yercaud and that P.W.s 1 and 2 deliberately committed perjury and implicated Mr. Rajesh as among the assailants.
The Sub Magistrate thought that in the interest of justice the petitioners should be prosecuted under section 193, Indian Penal Code and accordingly filed a complaint against the petitioners under section 193, Indian Penal Code in the Court of District Magistrate (Judicial), Salem.
The petitioners contended, that the complaint was not maintainable in law because the trying Magistrate had not followed the procedure under section 479 A, Criminal Procedure Code and it was therefore not open to the Magistrate to take recourse to the provisions of section 476, Criminal Procedure Code.
By his order dated February 10, 1964 the District Magistrate discharged the petitioners holding that the complaint was not sustainable in view of the decision of this Court in Shafer Hussain Bholu vs State of Maharashtra(1).
Thereupon the respondent filed Criminal.
R.C. No. 1261 of 1964 in the Madras High Court against the order of the District Magistrate (Judicial), Salem.
By his 375 judgment dated December 9, 1965 Anantanarayanan, J. set aside the orders of the District Magistrate (Judicial) and directed that the case should be taken up by the District Magistrate and the trial proceeded with in accordance with law.
This appeal is brought, by special leave, from the order of the Madras High Court dated December 9, 1965 in Crl.
R.C. No. 1261 of 1964.
The question of law arising in this case is what is the true meaning and scope of section 476, Criminal Procedure Code in the context of section 479 A(1) and (6), Criminal Procedure Code with regard to a prosecution authorised by a Court in respect of an offence of prejury committed before it in the course of the trial? Chapter XXXV of the Code of Criminal Procedure prescribes the procedure to be followed for prosecution of offenders in case of certain offences affecting the administration of justice.
Section 4/6 sets out the procedure for prosecution of offenders for offences enumerated in section 195(1)(b) and (c) of the Code of Criminal Procedure.
If a Civil, Revenue or Criminal Court is of opinion, that it is expedient in.
the interests of justice that an enquiry should be made into any offence referred to in section 195(1)(b) or (c) which appears to have been committed in or in relation to a proceeding in that Court, such Court may, after such preliminary inquiry, if any, as it thinks necessary, record a finding to that effect and make a complaint thereof in writing and forward the same to a Magistrate of the first class having jurisdiction.
Section 476 A authorises a superior Court to make a complaint where a Subordinate Court has omitted to do so in respect of offences and in the circumstances mentioned in section 476(1).
Section 476 B provides for a right of appeal against the order making or refusing to make a, complaint.
Sections, 478 and 479 deal with the procedure which may be followed in certain grave cases.
Section 479 A which was added by the Code of Criminal Procedure (Amendment) Act 26 of 1955 by the first sub section (in so far as it is material) provides as follows.
"479 A. (1) Notwithstanding anything contained in sections 476 to 479 inclusive, when any Civil, Revenue or Criminal Court is of opinion that any person appearing before it as a witness has intentionally given false evidence in any stage of the judicial proceeding or has intentionally fabricated false evidence for the purpose of being used in any stage of the judicial proceeding, and that, for the eradication of the evils of perjury and fabrication of false evidence and in the interests of justice, it is expedient that such witness should be prosecuted for the offence which appears to have been committed by him, the Court shall, at the time of the delivery of the judgment or final order disposing of such proceeding, record a finding to that effect stating its reasons therefor and 37 6 may, if it so thinks fit, after giving the witness an opportunity of being heard, make a complaint thereof in writing signed by the presiding officer of the Court setting forth the evidence which, in the opinion of the Court, is false or fabricated and forward the same to a, Magistrate of the first class having jurisdiction, and may. . . . " Sub section (6) of this section enacts as follows: "(6) No proceedings shall be taken under sections 476 to 479 inclusive for the prosecution of a person for giving or fabricating false evidence, if in respect of such a person proceedings may be taken under this section.
The scheme of section 479 A is to enact a special procedure for the more expeditious and effective manner of dealing with certain cases of perjury and fabrication of false evidence by witnesses in the course of judicial proceedings.
There is, however, a necessary condition for the application of section 479 A, Criminal Procedure Code.
The condition is that the Court before it delivers its judgment or at any rate at the time of delivering the judgment must form an opinion that a particular witness or witnesses, is, or, are giving false evidence, if the court could not form any opinion about the falsity of the evidence of the witness appearing before it, then certainly the court cannot at the time of delivering its judgment, record any finding about the same.
It is manifest that a court can come to a conclusion that a witness is false only when there are materials placed before it to justify that opinion.
If no materials are placed before the court to enable the court to form an opinion that a witness is giving false evidence, then certainly it could not form that opinion.
In the present case, the respondent produced material before the trial court on December 23, 1963 after the conclusion of the trial that the petitioners had given false evidence in the case and the respondent produced the necessary documents along with an application for proceeding against the petitioners under section 476, Criminal Procedure Code.
Till those documents were produced there was no opportunity or occasion for the magistrate to form an opinion about the falsity of the evidence adduced by the petitioners.
It is, therefore, manifest that at the time when the judgment was delivered the magistrate had no material before him to form an opinion that the petitioners had given false evidence.
It is only after the respondent had made his application on December 23, 1963 and brought the necessary material to the notice of the court that the falsity of the evidence of the petitioners became apparent and the magistrate was in a position to form an opinion about the falsity of the evidence given by the petitioners.
It is, therefore, clear that section 479 A will not be applicable on the facts of this case, and if the provisions of section 479 A will not apply on the facts of this case it follows that the bar contemplated by cl.
(6) of that section will not be applicable.
The reason is that cl.
(6) can be invoked only in cases in which 377 s.479 A(1) will be applicable.
The crucial words of cl.
(6) are "if in respect of such a person proceedings may be taken under this section".
It is clear that the bar under section 479 A (6) refers not to the legal character of the offence per se but to the possibility of action under section 479 A upon the facts and circumstances of the particular case.
If, for instance, material is made available to the court after the judgment had been pronounced, rendering it clearly beyond doubt that a person had committed perjury during the trial and that material was simply unavailable to the Court before or at the time of judgment, it is very difficult to see how the court could have acted under section 479 A, Criminal Procedure Code at all.
It cannot be supposed that the legislature contemplated that such a case of perjury, however, gross should go unpunished in such circumstances.
It appears to us that the true interpre tation of the language of cl.
(6) of section 479 A is that it does not operate as a bar to the prosecution for perjury in a case of this description.
Take, for instance, the trial of 'A ' for the murder of 'B ' in the Sessions Court where 'C ', 'D ' and 'E ' gave evidence that they actually saw 'A ' committing the murder of 'B '.
Suppose at the conclusion of the trial and after delivery of judgment by the Sessions Court 'B ' is found alive and there is incontestable evidence to show that 'A ' was falsely charged for the murder of 'B '.
Is it to be contemplated that in such a case there is no re medy available to the Court to prosecute C, D, and E for perjury under the provisions of section 476, Criminal Procedure Code, though action cannot be taken, in the circumstances of the case, under section 479 A, Criminal Procedure Code? In our opinion, such a startling consequence was not contemplated by Parliament and the bar of cl.
(6) of section 479 A was intended only to apply to cases of perjury and fabrication of false evidence in which the trying Magistrate could have acted under section 479 A(1).
In other words, the bar of cl.
(6) will not apply to a, case where perjury is detected not merely with reference to the evidence adduced at the trial but with reference to the evidence adduced in some other distinct proceeding, not then brought before the court or because there is some other material subsequently produced after the conclusion of the trial and delivery of judgment which renders the prosecution for perjury essential in the interests of justice.
Applying the principle in the present case we are of opinion that the prosecution of the petitioners under the provisions of section 476, Criminal Procedure Code by the Magistrate after the conclusion of the trial is legally valid and is not affected by the bar of cl.
(6) of section 479 A, Criminal Procedure Code.
On behalf of the appellants Mr. Thiagarajan referred to the decision of this Court in Shabir Hussein Bholu vs State of Maharashtra(1).
But the Principle of that decision does not afford any assistance to the appellants in this case.
It appears that the (1) [1963] Supp. 1 S.C.R. 501.
378 appellant in that care appeared as a witness in a jury trial for murder.
Before the Court he, gave a statement contradictory to the ,one he had given before the committing court.
After the conclusion of the trial and delivery of judgment the Sessions Judge passed a separate order for prosecution of the appellant for intentionally giving false evidence under section 193, Indian Penal Code.
It was held by this Court that the provisions of section 479 A had not been complied with and.
no cognizance could be taken of the offence.
Two conditions were laid down for the exercise of the powers under section 479 A, (i) the court must form an opinion that the person has committed one of the two categories of offences referred to in section 479 A, and (ii) the Court must come to the conclusion that for the eradication of the evils of perjury etc.
and in the interests of justice it is expedient that the person be prosecuted.
This opinion and conclusion must be arrived at the time of the delivery of the judgment or final order in the trial , the court cannot later on resort to section 476 and make a complaint against the witnesses.
The provisions of section 479 A were held applicable to the case and the fact that the trial was with the aid of a jury did not preclude the Sessions Judge from recording the findings required by section 479 A.
While considering whether action should be taken under section 479 A it was open to the Sessions Judge to say whether the evidence tendered at the trial was true or false.
It is manifest that the material in that case was produced before the Sessions Court for coming to the conclusion that the appellant had committed perjury and so the procedure contemplated In section 479 A(1) was applicable and since the Sessions Judge did not proceed under that section, though he could have done so, the bar contemplated by cl.
(6) of section 479 A operated and no action could have been taken under section 476, Criminal Procedure Code.
The ratio of that decision is not applicable to the present case because the material facts are different.
It is necessary to add that in Shabir Hussein Bholu vs State of Maharashtra(1) this Court observed that if the Judge is unable to come to a conclusion that the statement made at the trial is false then provisions of section 479 A (1) would not be applicable.
At page 512 of the Report it was observed by this Court as follows: "But, for considering the applicability of section 479 A(1) what hag to be borne in mind is that in a jury trial it is possible for the Judge to come a conclusion that the statement made at the trial is false.
If he comes to that conclusion then, as rightly observed in Badullah 's case (A.I.R. 1961 All. 397), he has no option but to proceed under section 479 A(1`), Cr.
P.C. The question then is whether he could act under this provision if he is unable to form an opinion one way or the other as to whether the evidence tendered at the trial is false or the evidence before the committing Magistrate is false.
What would be the position in such a case? If the proceed [1963] Supp. 1. S.O.R. 501.
379 ings before the committing Magistrate must be held to be entirely separate proceedings then we agree with the Allahabad High Court that section 479 A.(1) would not apply.
" There is divergence of opinion among the various High Courts on the question of law presented for determination in this case.
In Jai Bir Singh vs Malkhan Singh and another(1), it was held by Sahai, J. that the bar of section 479 A(6) applies to all cases of perjury, viz., (1) those where the perjury or the fabrication of false evidence has been detected by the court when the judgment is pronounced, and (2) cases where the perjury or fabrication of false evidence does not come to light till after the judgment has been pronounced and it was not open to the Court to proceed under section 476, Criminal Procedure Code for prosecution in the latter class of cases.
The same view has been taken by the Punjab High Court in Parshotam Lal L. Vir Bhan vs Madan Lal Bishambar Das(2) and the Rajasthan High Court in Amolak vs State(1).
A contrary view has been expressed by the Madras High Court in C. P. Kasi Thevar vs Chinniah Konar(4) and In re. Gnanainuthu(5).
For the reasons already expressed we are of opinion that the decision of the Madras Court in C.P. Kasi Thevar vs Chinniah Konar(4) and In re. Gnanamuthu(5) represents the correct law on the point.
For these reasons we hold that there is no merit in this appeal which is accordingly dismissed.
Appeal dismissed.
A.I.R. 1958 All.
(2) A.I.R. 1959 Punjab 145.
(3) A.I.R. (1) A.I.R. 1960 Mad. 77.
(5) A.I.R. 1964 Mad. | At a trial, the appellants gave evidence against the respondent.
After the Conclusion of the trial the respondent filed a petition in the court of the Magistrate under section 476(1) Criminal Procedure Code, praying for the prosecution of the appellants for giving false evidence under section 193 Indian Penal Code, and adduced evidence in sup port of his contention.
The Magistrate thought that in the interest of justice the, appellants should be prosecuted and accordingly filed a complaint.
The appellants contended that the complaint was not maintainable because the trying Magistrate had not followed the procedure under section 479 A, Criminal Procedure Code and it was therefore not open to the Magistrate to take recourse to the provisions of section 476.
HELD: The prosecution of the appellants under the provisions of section 476 Criminal Procedure Code by the Magistrate after the conclusion of the trial was legally valid and wag not affected by the bar of cl.
(6) of section 479 A. Criminal Procedure Code.
[377G] The bar of cl.
(6) will not apply to a case where perjury is detected not merely with reference to the evidence adduced at the trial but with reference to the evidence adduced in some other distinct proceeding not then brought before the court or because there is some other material subsequently produced after the conclusion of the trial and delivery of judgment which renders the prosecution for perjury essential in the interests of justice.
[377 F] Shabir Hussein Bholu, vs State of Maharashtra, [1963] Supp.
I S.C.R. 501, explained and distinguished.
C.P. Kasi Thevar vs Chinniah Konar, A.I.R. 1960 'Mad. 77 and In re Gnanamuthu A.I.R. 1964 Mad.
446, approved.
Jai Bir Singh vs Malkhan Singh.
A.I.R. 1958 All.
364, Parsotam Lal Vir Bhan vs Madan Lal Bashambar Das, A.I.R. 1959 Punj.
145 and Amolak vs State.
A.I.R. 1961 Rai. 220, disapproved. |
Appeals Nos. 19 & 20 of 1963.
Appeals from the judgment and decree dated July 31, 1959 of the Patna High Court in Appeals from Original Decree Nos. 30 and 40 of 1953 respectively.
section T. Desai and R. C. Prasad for appellant.
Sarjoo Prasad and D. Goburdhan, for the respondents Nos.1 to 4 [In C. A. No. 19 of 1963].
Sarjoo Prasad and K. K. Sinha, for respondents Nos.
5 7 and 9 [In C. A. No. 19 of 1963] and 1 3 and 5 [In C. A. No. 20 of 1963].
2 The Judgment of the Court was delivered by Bachawat, J.
One Ramyad Singh was a member of a joint family and has eight annas interest in the joint family properties.
He was a Hindu governed by the Mitakshara school of Hindu law.
He died issueless, leaving his widow, Mst.
Bhagwano Kunwar.
The date of his death is in dispute.
After his death, Bhagwano Kunwar filed the present suit for partition of the joint family properties claiming eight annas share therein.
She contended that Ramyad Singh died in 1939 after the passing of the Hindu Women 's Rights to Property Act, 1937, and she was entitled to maintain the suit for partition.
The defendants contended that Ramyad Singh died ill 1936 before the passing of the Act and she was entitled to maintenance only.
The trial Court accepted the plaintiff 's contention aid decreed the suit.
The defendants filed two separate appeals to the High Court.
On December 15, 1958, Bhagwano Kunwar died.
The High Court passed orders substituting one Ram Gulam Singh in her place.
Later, the High Court recalled these orders, as it was conceded that Ram Gulam Singh was not her legal representative.
By a deed dated March 14, 1958, Bhagwano Kunwar had sold lands measuring 1 bigha 5 kathas to the appellant.
The High Court allowed the appellant 's application for substitution under 0.22 r. 10 of the Code of Civil Procedure and proceeded to hear the appeals.
The High Court accepted the defendants ' contention, reversed the decree passed by the Subordinate Judge, and dismissed the suit.
The appellant has now filed these appeals under certificates granted by the High Court.
The main point in controversy is, did Ramyad Singh die in 1936 or did he die in 1939? If he died in 1936, Bhagwano Kunwar was not entitled to maintain the suit for partition and the suit was liable to be dismissed.
But if he died in 1939, she was entitled to eight annas share in the joint estate and was entitled to maintain the suit for partition under the Hindu Women 's Rights to Property Act, 1937 read with the Bihar Hindu Women 's Rights to Property ,(Extension to Agricultural Land) Act, 1942.
Moreover, it is ,conceded by counsel for the respondents that in that event after 1956 she held her eight annas share in the joint estate as full owner by virtue of section 14 of the , and on the strength ,of the sale deed dated March 14, 1958 executed by Mst.
Bhagwano Kunwar the appellant was entitled to continue the suit for partition .after her death.
There is conflicting oral evidence with regard to the date of ,death of Ramyad Singh.
The appellant relied strongly upon an admission made by the main contesting defendants, Janki Singh and Kailashpati Singh, in a plaint signed and verified by them and filed in Title Suit No. 3 of 1948.
In that plaint, Janki Singh and Kailashpati Singh claimed partition of the joint family properties, implead 3 ing Bhagwano Kunwar as defendant No. 8 and other members of the joint family as defendants Nos.
1 to 7.
In this plaint, Janki Singh and Kailashpati Singh stated: "2.
That the properties described in Schedule 1 to 2 in the plaint belong to the joint family.
As the said Babu Ramyad Singh died in 1939 the defendant No. 8 also became entitled to life interest in the properties of the joint family.
The defendant No. 8 surrendered her life estate to the plaintiffs and the defendants Nos. 1 to 7 and she gave up her possession of the joint family properties.
The plaintiffs and the defendants Nos. 1 to 7 have been coming in joint possession of the properties under partition.
That the defendant No. 8 is also made a defendant in this suit as she is entitled to maintenance," The plaint contained a clear admission that Ramyad Singh died in 1939.
The High Court ruled that Bhagwano Kunwar could not rely on this admission.
The High Court said that she could not rely upon the statement that Ramyad Singh died in 1939, as she was not prepared to admit the correctness of the statement that she had surrendered her estate and was entitled to maintenance only.
We are unable to accept this line of reasoning.
It is true that Bhagwano Kunwar relied only upon the statement that Ramyad Singh died in 1939 and was not prepared to accept the statement that she had surrendered her share to the other members and was entitled to maintenance only.
But she tendered the entire plaint, and she did not object to the admissibility or proof of any of the statements made therein.
All the statements in the plaint are,.
therefore, admissible as evidence.
The Court is, however, not bound to accept all the statements as correct.
The Court may accept some of the statements and reject the rest.
In the presented suit, it is common case that Bhagwano Kunwar did not surrender her share in the estate.
We must, therefore, reject the statement with regard to the alleged surrender and the consequential allegation that she was entitled to maintenance only.
The statement in the plaint as to the date of death of Ramyad Singh must be read as an admission in favour of Bhagwano Kunwar.
The High Court also observed that an admission in a pleading can be used only for the purpose of the suit in which the pleading was filed.
The observations of Beaumont, C.J. in Ramabai Shriniwas vs Bombay Government(l) lend some countenance to this view.
But those observations were commented upon and explained by the Bombay High Court in D. section Mohite vs section I Mohite(2).
An admission by a party in a plaint signed and verified by him in a prior suit is an admission within the meaning of section 17 of the Indian (1) A.I.R. 196O Bom.
(2) A.I.R. 1941 Bom.
4 Evidence Act, 1872, and may be proved against him in other litigations.
The High Court also relied on the English law of evidence.
In Phipson on Evidence, 10th Edn, article 741, the English law is thus summarised: "Pleadings, although admissible in other actions, to show the institution of the suit and the nature of the case put forward, are regarded merely as the suggestion of counsel, and are not receivable against a party as admissions, unless sworn, signed, or otherwise adopted by the party himself." Thus, even under the English law, a statement in a pleading sworn, signed or otherwise adopted by a party is admissible against him in other actions.
In Marianski vs Cairns(1), the House of Lords decided that an admission in a pleading signed by a party was evidence against him in another suit not only with regard to a different subject matter but also against a different opponent.
Moreover, we are not concerned with the technicalities of the English law.
Section 17 of the makes no dis tinction between an admission made by a party in a pleading and other admissions.
Under the Indian law, an admission made by a party in a plaint signed and verified by him may be used as evidence against him in other suits.
In other suits, this admission cannot be regarded as conclusive, and it is open to the party to show that it is not true.
The explanation of Janki Singh and Kailashpati Singh that the plaint was drafted by their lawyer Ramanand Singh at the instance of the panchas including one Ramanand and they signed and verified the plaint without understanding its contents cannot be accepted.
There is positive evidence on the record that the plaint was drafted at the instance of Janki Singh and was filed under his instructions.
The plaint was signed not only by Janki Singh and Kailashpati Singh but also by their lawyer, Ramanand Singh.
Neither Ramanand Singh nor the panch Ramanand was called as a witness.
Even in this litigation, Ramanand Singh was acting as a lawyer on behalf of some of the defendants.
Kailashpati Singh is a Homeopathic medical practitioner and knows English.
The plaint was read over to Janki Singh.
Both Janki Singh and Kailashpati Singh signed the plaint after understanding its contents and verified all the statements made in it as true to their knowledge.
They then well knew that Ramyad Singh had died in 1939 after the passing of the Hindu Women 's Rights to Property Act.
It is not shown that the admission in the plaint as to the date of death of Ramyad Singh is not true or that it was made under some error or misapprehension.
This admission must be regarded as a strong (1) 5 piece of evidence in this suit with regard to the date of death of Ramyad Singh.
Bhagwano Kunwar and her witnesses, Ram Gulam Singh, Ram Saroop Singh and Sheo Saroop Singh gave evidence in Sep tember, 1952.
They all swore that Ramyad Singh died 13 years ago.
In agreement with the trial Judge, we accept their testimony.
Learned counsel commented on the testimony of Sheo Saroop Singh, who had said that the last earthquake took place 15 to 16 years ago and Ramyad Singh died 2 years 8 months thereafter.
The last earthquake took place on January 15, 1934, and counsel, therefore, argued that Ramyad Singh could not have died in 1939.
Clearly, there is some confusion in the evidence of Sheo Saroop Singh.
He gave evidence in September, 1952, and his statement that the earthquake took place 15 to 16 years ago could not be correct and his further statement that Ramyad Singh died 2 years 8 months after the earthquake was not accurate.
He swore positively that Ramyad Singh died 13 years ago.
Bhagwano Kunwar said that there were receipts to show that Ramyad Singh died 13 years ago.
On her behalf rent receipts for 1339, 1341, 1342, 1343, 1345, 1348, 1356 and 1359 faslis were tendered.
The rent receipts are in respect of certain lands held by her as a tenant.
The first four rent receipts show that Lip to 1343 fasli corresponding to 1936 the rent used to be paid by her through Ramyad Singh.
Payment of the rent for 1345 fasli was made in 1346 fasli corresponding to 1939 through Janki.
The rent for the subsequent years was paid through Janki and other persons.
The High Court thought that the rent receipts showed that Ramyad Singh died in 1936 and because of his death, rent was subsequently paid through other persons.
But the rent receipt for 1344 fasli is not forthcoming, and it is not known who paid the rent for 1344 fasli (1937).
Moreover, assuming that Ramyad Singh did not pay rent in 1937 and 1938, it does not follow that he must have died in 1936.
Kailashpati Singh, Janki Singh and other witnesses called on behalf of the defendants said that Ramyad Singh had died 16 years ago.
In agreement with the trial Court, we do not accept their testimony.
Janki Singh and Kailashpati Singh gave false explanations with regard to the admission made by them in the plaint in the previous suit.
Moreover, for the purpose of defeating the title of Bhagwano Kumar they set up a compromise decree passed in that suit.
The trial Court found that the compromise decree was obtained by them by practising fraud on Mst.
Bhagwano Kunwar, and this finding is no longer challenged.
We, therefore, hold and find that Ramyad Singh died in 1939.
It follows that Bhagwano Kunwar was entitled to eight annas share in the joint family estate, and was entitled to maintain the Suit.
The trial Court, therefore, rightly decreed the suit.
6 But in view of the death of Bhagwano Kunwar during the pendency of the appeal in the High Court, the decree passed by the trial Court must be modified.
The appellant purchased from Bhagwano Kunwar 1 bigha 5 kathas of land under the deed dated March 14, 1958, and he can claim only the rights of an alienee of a specific property from a co owner on a general partition of the undivided properties.
All the parties appearing before us conceded that on such a partition the appellant is entitled to allotment and separate possession of the lands purchased by him under the deed dated March 14, 1958.
The deed is not printed in the Paper Book.
It will be the duty of the trial Court now to ascertain full particulars of the aforesaid lands.
The appeals are allowed with costs in this Court and in the High Court.
The decree passed by the High Court is set aside.
There will be a decree in favour of the appellant allotting to him the lands purchased by him under the deed dated March 14, 1958 and awarding to him separate possession thereof.
The trial Court will draw up a suitable decree after ascertaining the particulars of the aforesaid lands.
Y. P. Appeals allowed. | The plaintiff tendered in evidence a plaint in an earlier suit and relied on an admission made by the defendants with regard to a fact in issue in the later suit.
The High Court ruled that the plaint was not admissible in evidence on two grounds, viz., (i) the plaintiff could not rely on a state ment in the plaint as an admission, as she was not prepared to accept the correctness of the other statements in the plaint and (ii) an admission in a pleading could be used only for the purposes of the suit in which the pleading was filed.
On appeal to this Court.
HELD : (1) All the statements in the plaint are admissible in evidence.
The plaintiff can rely upon a statement in the plaint with regard to a matter in issue as an admission, though she is not prepared to accept the correctness of the other statements in the plaint.
Nor is the Court bound to accept all the statements as correct.
The court may accept some of the statements as correct and reject the rest.
[3 F] (2) Section 17 of the makes no distinction between a admission made by a party in a pleading and other admissions.
An admission made by a party in a plaint signed and verified by him may be used as evidence against him in other suits.
In other suits, this admission cannot be regarded as conclusive and it is open to the party to show that it is not true.
[4 D] D. section Mohite, vs section I. Mohite, A.I.R. 1960 Bom.
153, Marianski vs Cairns, and Ramabai Shriniwas vs Bombay Government,A.I.R. , referred to, |
Appeal No. 469 of 1966.
Appeal by special leave from the judgment and decree dated November 25, 1965 of the Bombay High Court in Civil Revision Application No. 1579 of 1962.
section G. Patwardhan and M. V. Goswami, for the appellant S.T. Desai and K. L. Hathi, for respondent No.1 The Judgment of the Court was delivered by Bachawat, J.
The question arising in this appeal by special leave is whether in a case falling under sub s.(3)(a) of section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Act No. 57 of 1947), a tenant can claim protection from eviction by showing his readiness and willingness to pay the arrears of rent before the date of the institution of the suit.
The appellant 's husband was a tenant of a flat The rent was in arrears 136 for a period of more than six months.
On December 22, 1956, the landlord served a notice on the tenant demanding the rent.
The tenant neglected to pay the rent within one month of the notice.
On January 11, 1957, he died.
On February 4, 1957, the appellant sent the arrears of rent to the landlord by money order, but the landlord refused to accept the payment.
On February 5, 1957, the landlord instituted the present suit for eviction of the appellant.
The trial Court decreed the suit.
The appellant filed a revision application before the Bombay High Court, but this application was dismissed by the High Court.
It is to be noticed that the rent was in arrears for a period of more than six months.
The tenant neglected to make payment of the arrears of rent within one month of the service of the notice by the landlord under sub section
(2) of s.12.
The rent was payable by the month, and there was no dispute regarding the amount of the rent.
The case was, therefore, precisely covered by sub section
(3)(a) of section 12.
Nevertheless, the appellant submitted that as she was ready and willing to pay the rent before the institution of the suit, she could claim protection under sub section
(1) of section 12.
She submitted that the decided cases support this conten tion.
In Mohanlal vs Maheshwari Mills Ltd.( '), P. N. Bhagwati, J. held that even in a case falling under sub section
(3) (a), a tenant could, by paying or showing his readiness and willingness to pay the arrears of rent before the institution of the suit, claim protection from eviction under sub section
A similar opinion was expressed by a Divisional Bench of the Gujarat High Court in Ambalal vs Babaidas(2).
The judgment under appeal dissented from the view expressed by the Gujarat High Court.
The Bombay High Court held, and, in our opinion, rightly, that in a case falling under sub section
(3)(a), the tenant could not claim protection from eviction by showing his readiness and willingness to pay the rent before the institution of the suit.
Sub section (1) of section 12 imposes a general restriction on the landlord 's right to recover possession of the premises so long as the tenant pays or is ready and willing to pay the rent and observes and performs the other conditions of the tenancy.
Subsection (2) of section 12 imposes the further restriction that no suit for recovery of possession on the ground of non payment of rent shall be instituted by the landlord until the expiration of one month after a notice in writing demanding the rent.
Sub section (3)(a) provides for the consequences which will follow where the rent is payable by the month, there is no dispute regarding the amount of rent, the rent is in arrears for a period of six months or more, and the tenant neglects to make payment within one month of the service of the notice under sub s (2).
In such a case, the tenant (1) (1962) 3 Gujarat Law Reporter, 574 at pp. 618 to 62).
(2) (1962) 3 Gujarat Law Reporter 625, 644.
137 cannot claim any protection under sub section
(1), and the Court is bound to pass a decree for eviction.
At the material time, sub section
(3) (a) of section 12 read : "Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub s (2), the Court may pass a decree for eviction in any such suit for recovery of possession.
" The word "may" in this sub section has the effect of "shall".
In Bhatya Punjalal Bhagwanddin vs Dave Bhagwatprasad Prabhuprasad(l), this Court held that where the requirements of sub section
(3)(a) were satisfied, the Court was bound to pass a decree for eviction.
The section has now been suitably amended, and the word "shall" has been substituted for the word "may" by Maharashtra Act No. 14 of 1963.
If the conditions of sub section
(3)(a) are satisfied, the tenant cannot claim any protection from eviction under the Act.
By terdering the arrears of rent after the expiry of one month from the service of the notice under sub section
(2), he cannot claim the protection under sub section
It is immaterial whether the tender was made before or after the institution of the suit.
In a case falling within sub section
(3)(a), the tenant must be dealt with under the special provisions of sub section
(3)(a), and he cannot claim any protection from eviction under the general provisions of sub section
The landlord is vested with the right to recover possession of the premises if the rent is in arrears for a period of six months or more, "the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub section
(2)", and the other conditions of sub section
(3)(a) are satisfied.
This right cannot be defeated by showing that the tenant was ready and willing to pay the arrears of rent after the default, but before the institution of the suit.
In effect, the appellant asks us to rewrite the section and to substitute in it the following condition : "the tenant neglects to make payment thereof until the date of the institution of the suit.
" It is not possible to rewrite the section in the manner suggested by the appellant.
The appellant 's case fell precisely within sub section
(3)(a) and she could not obtain immunity from eviction by tendering the rent before the institution of the suit.
The appeal is dismissed with costs.
V.P.S. Appral dismissed.
(1) ; ,330 331. | The tenant of a flat was in arrears of rent for more than six months.
The landlord served a notice on the tenant demanding the rent.
The tenant did not pay it within one month of the notice, but tendered it after the expiry of the month.
The landlord refused to receive it and filed a suit for eviction under section 12(3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The tenant claimed the protection of section 12(1) of the Act on the ground that she was ready and willing to pay the rent before the institution of the suit.
HELD : Under section 12(3) (a), the landlord is vested with the right to recover possession of the premises if the rent is in arrears for six months or more, the tenant neglects to pay it until after the expiry of one month after notice demanding the rent and other conditions of sub s.(3) (a) are saitisfied.
This right cannot be defeated by showing that the tenant was ready and willing to pay the rent after the default but before the institution of the suit.
In a case falling within sub section
(3) (a), the tenant must be dealt with under its special provisions and he cannot claim any protection from eviction under the general provisions of sub section
(1): and the court was bound to pass a decree for eviction.
[137 E, F] Bhaiya Punjalal Dhagwanddin vs Dave Bhagwat Prosad Prabhuprasad, [19631 3 S.C.R. 312, followed.
Mohanlal vs Maheshwari Mills Ltd. and Ambala, vs Babaldas, , overrules. |
Appeal No. 556 of 1964.
Appeal from the judgment and order dated March, 24, 1961 of the Assam and Nagaland High Court in M. A. (F) No. 29 of 1956.
B. Sen and D. N. Mukherjee for the appellant.
section G. Patwardhan and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Wanchoo, J.
This is an appeal on a certificate granted by the Assam High Court and arises in the following circums tances.
The appellant had obtained a money decree against Thakur Prosad Joyaswal and others in 1947.
As the decree remained unsatisfied it was transferred from Calcutta to Gauhati for execution.
On May 2, 1953, an application was made for execution in the court at Gauhati by attachment under 0.
XXI, r. 46 of the Code of Civil Procedure of certain movable property of the judgment debtors which was said to be in the possession of the Sub Divisional Officer, Military Engineering Service, Pandu.
Consequently an order was issued under O.XXI r. 46 (1)(c)(iii) prohibiting the Sub Divisional Officer from parting with 208 the property of the judgment debtors.
It may be mentioned that the Sub Divisional Officer is subordinate to the Garrison Engineer, Shillong.
Though certain applications were put in on behalf of the Sub Divisional Officer before the court, it was only on February 1, 1954 that the Acting Garrison Engineer, Shillong stated before the court that the movable property in question (i.e. 41 R.S. joists) had been sold and delivered as far back as November 22, 1951 to Messrs. Ghunilal Kanhaiyalal of Palasbari.
This objection was considered by the execution court and it held on September 25, 1964 that this belated statement that the property in question had been sold as far back as November 22, 1951 could not be believed.
The execution court therefore dismissed the objection and ordered execution to proceed.
Thereafter orders were issued for the production of the joists but they were not produced.
Thereupon the appellant applied that the Union of India should be considered to be the principal judgment debtor and execution should be levied against the Union of India.
The Union of India objected to this and on April 21, 1956 the objection of the Union of India was dismissed and the execution court held that the Union of India be treated as the principal judgment debtor and be made liable to the extent of the proceeds of the attached joists.
Later on the same day, a further legal argument was raised on behalf of the Union of India to the effect that as there was no surety bond the Union of India could not be treated as the principal judgment debtor.
This objection was heard and finally the court ordered on April 28, 1956 that even though there was no surety bond executed on behalf of the Union ,of India it was liable as a surety.
Thereupon the Union of India appealed to the High Court against the order of April 28, 1956.
The High Court allowed the appeal and set aside the order ,of the execution court holding that no action could be taken against the Union of India under section 145 of the Code of Civil Procedure upon which the execution court had apparently relied.
Thereupon the appellant asked for and obtained a certificate from the High Court, and that is how the matter has come before us.
We are of opinion that there is no force in this appeal.
Order XXI r. 46(i) provides that in the case of other movable property not in the possession of the judgment debtor, except property deposited in or in the custody of any court, the attachment shall be made by a written order prohibiting the person in possession of the same from giving it over to the judgment debtor.
The necessary prohibitory order had been issued by the execution court in this case with respect to 41 joists and had been received by the Sub Divisional Officer.
Such a prohibitory order is sufficient for the purpose of attachment, though the 20 9 property mentioned therein is not actually taken in possession by the Court.
After attachment has been made in the manner provided by r. 46 the next step that the court has to take is to order sale of the property attached.
Then comes O.XXI r. 79 which provides that where the property sold is movable property of which actual seizure has been made, it shall be delivered to the purchaser [see r. 79(1)].
But where the property sold is movable property in the possession of some person other than the judgment debtor, the delivery thereof to the purchaser shall be made by giving notice to the person in possession prohibiting him from delivering possession of the property to any person except the purchaser [see r. 79 (2)].
In the present case there was no actual seizure of the property but attachment had been made under O.XXI r. 46 (1).
The proper procedure for the court to follow was to sell the property under O.XXI r. 64 and then pass an order under O.XXI r. 79 (2) for its delivery in the manner provided therein.
The court however went on asking the Sub Divisional Officer to produce the property and when it was not produced it proceeded under section 145 of the Code.
We agree with the High Court that section 145 has no application in the present case.
Section 145 runs thus : "Where any person has become liable as surety (a) for the performance of any decree or any part thereof, or (b) for the restitution of any property taken in execution of a decree, or (c) for the payment of any money, or for the fulfilment of any condition imposed on any person, under an order of the court in any suit or in any proceeding consequent thereon, the decree or order may be executed against him, to the extent to which he has rendered himself personally liable in the manner therein provided for the execution of the decrees and such person shall, for the purposes of appeal be deemed a party within the meaning of section 47: Provided that such notice as the court in each case thinks sufficient has been given to the surety.
" A bare perusal of section 145 shows that it applies when a person has become liable as surety.
Now the mere fact that an attachment was made of 41 joists said to be lying with the Sub Divisional Officer by the issue of the prohibitory order under O.XXI r. 46 does not make the Sub Divisional Officer or the Union of India a surety for the performance of the decree which was in execution.
There was no surety bond taken from the Sub Divisional Officer and the joists 2 1 0 were not actually seized by the court and handed over to the Sub Divisional Officer as suparddar on the basis of a surety bond.
If that had been done some question may have arisen whether the Sub Divisional Officer did become a surety for the performance of the decree or part thereof.
But where merely a prohibitory order is issued under 0.
XXI r. 46(1) and attachment is made in that manner, there can be no question of the person to whom the prohibitory order is issued becoming a surety for the performance of the decree.
We therefore agree with the High Court that section 145 of the Code was not applicable to this case and the execution court was completely wrong in holding that the Sub Divisional Officer became a surety simply because attachment had been made in the manner provided in O.XXI r. 46 (1),.
The appeal fails and is hereby dismissed with costs to the Union of India.
V.P.S. Appeal dismissed. | The appellant, who was the decree holder, applied for the execution of the decree.
The Sub Divisional Officer, Military Engineering Service, was in possession of some movable property of the judgment debtor.
The Court ordered attachment under 0.
XXI, r. 46(1), Civil Procedure Code by prohibiting the Sub divisional Officer from handing over the property to the judgment debtor.
Thereafter, in stead of following the proper price(lure which was to sell the property under O.XXI, r. 64 and then pass an order for its delivery under O.XXI, r. 79(2), the Court ordered the Sub divisional Officer to produce the property, and, when it was not produced, proceeded under section 145 of the Code treating the Union of India as the principal judgment debtor.
HELD: Section 145 of the Code was not applicable to the cage.
That section only applies when a person becomes liable as a surety and the execution Court was wrong in holding that the Sub divisional Officer became a surety simply because attachment had been made by the prohibitory order under O.XXI, r. 46(1).
[209 H, 210 B C] |
Appeal No. 733 of 1964.
Appeal by special leave from the judgment and decree dated August 1,1960 of the Assam and Nagaland High Court in F.A. No. 33 of 1955.
Naunit Lal, for the appellants.
R. Gopalakrishnan, for the respondents.
The Judgment of the Court was delivered by Wanchoo, J.
This is an appeal by special leave against the judgment of and decree of the Assam High Court and arises in the following circumstances.
The Gauhati Bank Limited (hereinafter referred to as the bank) brought a suit against the appellants for the recovery of Rs. 40,000/ .
Its case was that appellant No. 1 had been dealing with the bank for the needs and business of the family consisting of himself and the other appellants as karta of the family, and in that connection he had an open, mutual and current account with the bank.
In that connection moneys were borrowed from the bank and moneys were also paid into the bank and a current account had been opened in the name of appellant No.1.
On March 1, 1947, a sum of Rs. 15,956/7/ was due to the bank from the appellants.
In order to pay off that amount, a mortgage deed was executed by the appellants in favour of the bank for Rs. 15,956/7/ , and some land, a house, a fixed deposit and three policies were given as security thereunder.
The mortgage deed also provided that the bank would advance money up to Rs. 16,000/to the appellants as and when they required it.
Interest would be payable at Rs. 6/ per cent per annum with monthly rests.
It was also provided that the entire amount due including any further advances taken upto the limit of Rs. 16,000/ and interest would be realised from the securities in certain order which was mentioned in the mortgage deed.
It was further provided that if the entire amount due could not be recovered from the property given in security, it would be recoverable personally from the appellants.
The case of the bank was that after the execution of this mortgage deed, a further sum of Rs. 10,000/ was borrowed by the appellants from the bank, on March 19, 1947.
Thereafter two amounts were paid into the bank, one on May 14,1948 and the other on November 900 24, 1949.
Nothing was paid thereafter and eventually on October 31, 1952 the amount due to the bank was Rs. 39,496/8/ .
The suit was filed on April, 9, 1953 for the sum of Rs. 40,000/ , and the usual prayer for sale of the mortgaged properties was made.
The suit was resisted by the appellants and a number of defences were taken on their behalf.
One of the defences with which we are now concerned was that the allegation of the bank that any money was taken as loan after March 1,1947 was in correct.
Another defence was that the allegation that on November 24, 1949, Rs. 100/ were repaid was untrue.
Further the appellants contended generally that the accounts of the bank were not kept correctly and in regular course of business and were fraudulent and were therefore not relevant and not admissible in evidence.
Two main questions arose on the pleadings, namely (i) what was the amount due to the bank from the appellants, and (ii) whether the suit was within limitation.
Seven issues were framed by the trial court of which issue No. 3 related to the amount due to the bank from the appellants and issue No.4 related to the question ,of limitation.
Other issues related to other points to which no reference is necessary to be made now, for we are not concerned with them.
Issue No. 3 relating to the total amount due to the bank appears to have been overlooked by the trial court, though when dealing with the seventh issue relating to relief to which the bank was entitled, the trial court said that the bank was entitled to Rs. 15,956/7/ , which were due on March 1, 1947 and Rs. 16,000/ which were to be further advanced under the mortgage deed of 1947, thus holding that Rs.32,000/ were due to the bank excluding interest.
The way the trial court dealt with this matter clearly shows that it did not understand what it had to find on the issue relating to the total amount due to the bank.
It seems to have treated the amount of Rs. 16,000/ (which was the limit of the advance to be made to the appellants) as if it was an actual advance made to them on March 1, 1947, even though the case of the bank was that that amount was not actually advanced.
The copy of accounts filed by the bank showed that Rs. 10,000/were advanced out of this limit of Rs. 16,000/ .
Further on the question of limitation, the trial court held that the suit was within time in view of the payment of Rs. 100/ on November 24, 1949.
It therefore decreed the suit after making a small deduction because interest had been calculated at Rs. 9/ per cent per annum instead of Rs. 6/ per cent per annum which was provided in the mortgage deed.
The appellants then went in appeal to the High Court.
The mortgage deed of March 1, 1947 was not disputed in the High Court, and the two main questions raised in the High Court were, namely 901 (i)that the sum of Rs. 10,000/ said to have been advanced on March 19, 1947 had not been proved to have been advanced in view of the fact that no evidence was produced besides the copy of the accounts to substantiate it, and in this connection reliance was placed on section 34 of the , No. 1 of 1872, and (ii) that the amount of Rs. 100/ had not been paid on November 24, 1949 and therefore the suit was barred by limitation.
The High Court seems to have held that the advance of Rs. 10,000/ had been proved on the basis of the copy of the account produced by the bank and the reason given for this was that there was no specific challenge to the correctness of any of the entries in the account, particularly to the specific entry relating to Rs. 10,000/ The contention as to limitation was also rejected by the High Court, and the appeal was dismissed.
Thereupon the appellants obtained special leave, and that is how the matter has come up before us.
The main question urged before us is that there is no evidence besides the certified copy of the account to prove that a sum of Rs. 10,000/ was advanced to the appellants and therefore in view of section 34 of the Evidence Act the appellants cannot be saddled with liability for that amount.
Section 34 is in these terms: "Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability.
" It is clear from a bare perusal of the section that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business.
There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them.
In the present case, however, the appellants did not accept the correctness of the books of account.
We have already indicated that they went to the.
length of saying that the accounts were not correctly kept, and were fraudulent.
They also said that no money had been taken by them after March, 1, 1947.
This being their pleading, the trial court rightly framed the third issue relating to the total amount due from the appellants to the bank.
But unfortunately it overlooked to go into that issue specifically and we have already indicated how it made a mistake in arriving at the amount due when considering the issue relating to relief.
In any case as the appellants had not admitted the correctness of the accounts filed by the bank, particularly after March 1, 1947, the bank had to prove payment of Rs. 10,000/ on March 19,1947 if it wanted to charge the appellants, 902 with liability for that amount, But all that the bank did was to produce a certified copy of account under section 4 of the Bankers ' Books Evidence Act, No. XVIII of 1891.
Section 4 of that Act reads thus "Subject to the provisions of this Act, a certified copy of anyentry in a banker 's book shall in all legal proceedingsbe received as prima facie evidence of the existence ofsuch entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise".
It will be clear that section 4 gives a special privilege to banks and allows certified copies of their accounts to be produced by them and those certified copies become prima facie evidence of the existence of the original entries in the accounts and are admitted as evidence of matters, transactions and accounts therein, but such admission is only where, and to the same extent as, the original entry itself would be admissible by law and not further or otherwise.
Original entries alone under section 34 of the Evidence Act would not be sufficient to charge any person with liability and as such copies produced under section 4 of the Bankers ' Books Evidence Act obviously cannot charge any person with liability.
Therefore, where the entries are not admitted it is the duty of the bank if it relies on such entries to charge any person with liability, to produce evidence in support of the entries to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence.
But no person can be charged with liability on the basis of mere entries whether the entries produced are the original entries or copies under section 4 of the Banker 's Books Evidence Act.
We cannot 'agree with the High Court that the mere fact that the appellants did not specifically mention the sum of Rs. 10,000/ as not having been advanced to them in their written statement would make any difference on the facts of the present case.
We have already pointed out that the appellants did not admit the correctness of the accounts produced specially after March 1, 1947.
We have also pointed out that it was stated on their behalf that nothing was borrowed after March 1, 1947.
The main appellant in whose name the account was, appeared as a witness and stated that so far as he remembered he only borrowed Rs. 8,000/ from the bank and nothing thereafter.
He also stated that he did not remember to have borrowed any sum from the bank after the execution of the mortgage deed.
In the face of this pleading of the appellants and the statement of one of them, the bank had to prove that the sum of Rs. 10,000/ was in fact advanced on March, 19,1947 and could not rely on mere entries in the books of account for that purpose.
This is clear from the provision in section 34 of the Evidence 903 Act.
No attempt was made on behalf of the bank to prove by any evidence whatsoever that a sum of Rs. 10,000/ was advanced on March 19, 1947.
The entry in the account books in that connection is to the effect: "To amount paid to Gauhati branch as per D/advice, dated 6th March, 1947".
If this amount of Rs. 10,000/was paid by the bank on the order of the appellants or any one of them that order should have been produced in support of the entry, and then the entry would have been helpful to the bank as a corroborative piece of evidence.
But the bank did nothing of the kind.
The only witness produced on behalf of the bank was an officer who had nothing to do with the Tezpur branch where the transactions were entered into.
We are therefore of opinion that in view of section 34 of the Evidence Act the appellants cannot be saddled with liability for the sum of Rs. 10,000/ said to have been advanced on March, 19,1947 on the basis of a mere entry in the amount.
Section 34 says that such entry alone shall not be sufficient evidence, and so some indepen dent evidence had to be given by the bank to show that this sum was advanced.
What would be the nature of such independent evidence would certainly depend upon the facts of each case; but there can be no doubt that some independent evidence to show that advance had been made has to be given.
Further, as in this, case the dispute was with respect to one entry of Rs. 10,000/ it should not have been difficult for the bank to produce evidence with respect thereto.
We cannot therefore agree with the High Court that the advance of Rs. 10,000/ on March 19, 1947 has been proved in this case.
It is urged on behalf of the bank that we might give opportunity now to the bank to prove that the money was in fact paid.
We are of opinion that it is too late now after 13, years to give a further opportunity to the bank to prove what should have been proved by it in the very beginning in view of the denial of liability for anything after March 1,1947 in the written statement of the appellants.
In this view of the matter, the appeal must be allowed with respect to this sum of Rs. 10,000/ Then we come to the question of limitation.
The suit is clearly within time insofar as the liability for sale under the mortgage deed is concerned as it was filed within 12 years of the execution of the mortgage (see article 138 of the Limitation Act of 1908).
As to the personal liability under this deed, that is beyond time as the suit was filed more than six years after the execution of the mortgage (see article 116 ibid).
Nor does the entry of payment of Rs. 100/in the accounts help the bank in this behalf.
That entry is of no value under section 19 or section 20 of the Limitation Act for neither a writing signed by the appellants nor an acknowledgement of payment in the handwriting of the appellants or in a writing signed by them has been proved.
Nor does article 85 of the Limitation Act of 1908 help the bank.
Assuming this Is a case of an open, current and mutual 904 account, the last payment was made in November 1949.
Article 85 gives limitation of three years from the close of the year in which the last item admitted or proved is entered in the accounts (such year to be computed as in the account).
The account in this case shows that the year was calendar year.
The mutuality in this case came to an end in 1949 for we find from the account that thereafter there are only entries of interest due to the bank upto October 31, 1952.
So the bank would get three years from the end of 1949 under article 85 and as the suit was filed on April 9, 1953, this entry will be of no help to the bank.
We are therefore of opinion that the bank cannot get a decree fixing personal liability on the appellants and all that it is entitled to is a decree for sale of the mortgaged property.
We therefore partly allow the appeal and declare that the amount due to the bank on April 9, 1953, the date of the suit, would be Rs. 15,956/7/ plus compound interest at the rate of Rs. 6/ per cent per annum with monthly rests up to that date minus the two sums, namely, Rs. 1,498/10/3 and Rs. 100/ shown as paid on May 14, 1948 and November 24, 1949, and thereafter Rs. 6/ per cent per annum simple interest will run.
The trial court will modify the preliminary decree passed by it accordingly and give the appellants three months ' time after the preliminary decree has been so modified to pay the amount failing which the bank would be entitled to pray for a final decree for sale of the properties mortgaged. 'Mere will be no personal decree.
The bank will get proportionate costs in the two courts below.
As the defence of the appellants has failed on the main question, they will bear their own costs throughout.
G.C. Appeal allowed in part. | The appellants through their karta had an open mutual and current account with the respondent bank.
They borrowed from the bank and also paid monies into it.
On March 1, 1947 a sum of Rs. 15,956/7 was due to the bankfrom the appellants.
In order to pay off that amount a mortgage deedwas executed by the appellants in favour of the bank.
Under that deedfurther amounts up to a limit of Rs. 16,000 could be advanced to the appellants against the security mentioned therein.
According to the bank, under the said provision of the deed a further sum of Rs. 10,000 was advanced to the appellants on March19, 1947.On April 9, 1953 the bank filed a suit for the recovery ofsums due to it from the appellants and the suit was claimed to be withinthe period of limitation on the allegation that on November 24, 1949, the appellants had repaid a sum of Rs. 100 to the bank.
The appellants denied that they had borrowed Rs. 10,000 as alleged or that they had repaid Rs. 100.
The trial court decreed the suit of the bank and the High Court upheld the decree.
The appellants then came to this Court by special leave.
The questions that fell for determination were (i) whether by producing a copy of the entry relating to the loan of Rs. 10,000 in these account books the bank had proved the said loan, (ii) whether the suit was within time.
HELD : (i) In view of section 34 of the Evidence Act the appellants could not be saddled with liability for the sum of Rs. 10,000 said to have been advanced to them on March 19.
1947 on the basis of a mere entry in the account.
Section 34 says that such entry alone shall not be suffi cient evidence and so some independent evidence had to be given by the bank to show that this sum was advanced.
Such evidence not having been given the claim could not be upheld.
[903 C] (ii)Section 4 of the Bankers ' Books Evidence Act (18 of 1891) certainly gives a special privilege to banks and allows certified copies of their accounts to be produced by them and those certified copies become prima facie evidence of the existence of the original entries in the accounts and are admitted as evidence of matters, transactions, and accounts therein.
But such admission is only where and to the extent as the original entry itself would be admissible by law and not further or otherwise.
Original entries alone under section 34 of the Evidence Act would not be sufficient to charge any person with liability and as such, copies produced under section 4 of the Bankers ' Books Evidence Act could not charge any person with liability.
[902 C E] (iii)The suit was clearly within time insofar as the liability for sale under the mortgage deed was concerned as it was filed within 12 years of the execution of the mortgage as allowed by article 138 of the Limitation Act of 1908.
[903 G] 899 As to the personal liability under the deed that was beyond time as the suit was filed more than six years after the execution of the mortgage allowed by article 116.
The entry of the payment of Rs. 100 in the accounts also did, not help the bank in this behalf.
That entry was of no value under section 19 or section 20 of the Limitation Act for neither a writing signed by the appellants nor an acknowledgement of payment in the handwriting of the appellants or in a writing signed by them had been proved.
Nor did article 85 help the bank in fixing personal, responsibility on the appellants as the time of three years allowed by that Article had ended before the filing of the suit.
[903 G H] |
Appeal No. 1109 of 1966.
Appeal by special leave from the judgment and order dated December 17, 1964 of the Punjab High Court (Circuit Bench) at Delhi in Civil Revision No. 159 D of 1963.
M. C. Setalvad, Veda Vyasa and K. K. Jain.
for the appellants.
section G. Patwardhan, K. L. Hathi and R. H. Dhebar, for the respondent.
844 The Judgment of the Court was delivered by Wanchoo, J.
This is an appeal by special leave against the judgment of the Punjab High Court and arises in the following circumstances.
The appellant entered into a contract with the Union of India, respondent herein, for construction of certain highway bridges.
In connection with the execution of the contract, some disputes arose between the parties and were referred to the joint arbitration of Sri B. K. Guha and Sri N. P. Gurjar.
As there was difference of opinion between the two arbitrators, the matter was referred to an umpire, namely, Sri Dildar Hussain, retired Chief Engineer, Hyderabad.
The umpire recorded evidence of the parties and gave his award on May 27, 1961.
It appears that the award was made in duplicate and one copy was sent to each party.
On August 4, 1961, the appellant made a petition before the Subordinate Judge First Class, Delhi under sections 14 and 17 of the , No. 10 of 1940, (hereinafter referred to as the Act).
it was prayed that the umpire be directed by the court to cause the award or a signed copy thereof together with any depositions and documents which might have been taken and proved before him to be filed in court (section 14).
It was further prayed that a judgment be passed in terms of the award (section 17).
It appears that on this petition the court issued notice to the umpire to file the award and the arbitration proceedings.
On September 13, 1961, the umpire wrote to the court that he was forwarding along with that letter the award in the case duly signed and certified by him.
On November 1, 1961, an objection was taken on behalf of the respondent that the award said to have been filed by the umpire had not been validly and legally filed under section 14 and as such no proceedings in pursuance of the said filing could be taken in court.
This objection was considered as a preliminary objection by the Subordinate Judge.
He came to the conclusion that the document filed in court was neither the original award nor a signed copy thereof, and as such the court could not take any action on that document.
He therefore allowed the objection and dismissed the application under section 17 for passing a judgment in terms of the award.
The appellant then went in revision to the High Court.
The High Court dismissed the revision application holding that the document filed in court was admittedly not the original award and that it was clear from a perusal of the document itself that it was not a signed copy thereof.
Certain alternative arguments were submitted to the High Court which were rejected and the revision application thus failed.
Thereupon the appellant obtained special leave, and that is how the matter has come up before us.
The main question that has been argued on behalf of the ap pellant is that the document in question is a signed copy of the 845 award within the meaning of those words in section 14(2) and therefore further proceedings should have been taken under section 17 of the Act.
Now the relevant part of section 14 (2) reads thus : "(2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the court. cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in court. . ." Therefore when a notice is issued by a court to the arbitrators or umpire it is their duty to file in court either the award in original or a signed copy thereof as directed by the court.
It is not in dispute that in the present case the original award has not been filed.
The dispute is whether the document filed is a signed copy of the award.
The main contention on behalf of the appellant is that the document is a signed copy of the award within the meaning of those words in section 14(2), and thus should have been acted upon by the court.
On the other hand, it is contended on behalf of the respondent that what has been filed is a certified copy of the award and not a signed copy thereof, and therefore it cannot be acted upon.
The High Court has accepted the contention of the respondent and all that it has said in that behalf is that it is clear from a perusal of the award that it is not a signed copy of the award but it is certified as correct copy of the award dated the 27th May, 1961.
Unfortunately, the High Court has not considered what exactly the words "signed copy of the award" mean, and it is to this problem that we must now turn.
Now the word "copy" as such is not defined in the Indian Evidence Act, of 1872.
But we get an idea of what a copy is from the provisions of section 63 of the Evidence Act.
That section inter alia defines what secondary evidence means and includes namely (i) certified copies as provided, in section 76 of the Evidence Act, (ii) copies made from the original by mechanical processes which in themselves insure the accuracy of the copy, and copies compared with such copies, and (iii) copies made from or compared with the original.
Obviously, therefore a copy means a document prepared from the original which is an accurate or true copy of the original.
In Webster 's New World Dictionary, the word "copy" means "a thing made just like another ; full reproduction or transcription".
What the word "copy" in section 14(2) therefore requires is that it must be a full reproduction of the original and that it should be accurate or true.
When a document is an accurate or true and full reproduction of the original it would be a copy.
In the present case it is not in dispute that what was produced by Sri Dildar Hussain was a true or accurate and full reproduction of the original.
It was therefore a copy of the original, and the 846 only question that remains is whether it was signed, for if it was signed, it would be a signed copy.
This brings us to the meaning of the word "sign" as used in the expression "signed copy".
In Webster 's New World Dictionary, the word "sign" means "to write one 's name on, as in acknowledging authorship, authorising action etc.
" To write one 's name is signature.
Section 3(56) of the General Clauses Act, No. 10 of 1897, has not defined the word "sign" but has extended its meaning with reference to a person who is unable to write his name to include "mark" with its grammatical variations and cognate expressions.
This provision indicates that signing means writing one 's name on some document or paper.
In Mohesh Lal vs Busunt Kumaree(1), a question arose as to what "signature" meant in connection with section 20 of the Limitation Act, No. IX of 1871.
It was observed that "where a party to a contract signs his name in any part of it in such a way as to acknowledge that he is the party contracting, that is a sufficient signature".
It was further observed that the document must be signed in such a way as to make it appear that the person signing it is the author of it, and if that appears it does not matter what the form of the instrument is, or in what part of it the signature occurs.
or?,, We accept these observations and are of the opinion that so long as there is the signature of the arbitrator or umpire on the copy of the award filed in court and it shows that the person signing authenticated the accuracy or correctness of the copy of the document would be a signed copy of the award.
It would in such circumstances be immaterial whether the arbitrator or umpire put down the words "certified to be true copy" before signing the copy of the award.
If anything, the addition of these words (namely, certified to be true copy) would be the clearest indication of the authentication of the copy as a true copy of the award, which is what section 14(2) requires, so long as the authentication is under the signature of the arbitrator or the umpire himself.
In the present case, the document was sent by the umpire along with a letter forwarding it to the court.
In the letter it was stated that he was sending the award only signed and certified by him.
Then turning to the document we find that it begins with the words "now I hereby reproduce a true copy of the said award which is as follows" and this is signed by Sri Dildar Hussain, the umpire.
Then follows the copy of the award, at the end we find the words "certified as correct copy of the award dated the 27th May, 1961 ".
Underneath appears the signature of Sri Dildar Hussain, the umpire.
Clearly therefore the document filed is a true or accurate and full reproduction of the original award and it bears the signature of the umpire, Sri Dildar Hussain, and thus is a signed copy of the award.
(1)(1881)1.L.R.6Cal.340.
847 The fact that the umpire wrote the words "certified as correct copy of the award dated the 27th May, 1961" above his signatures does not in our opinion make any difference and the document it still a signed copy of the award.
If anything, these words show that document filed is a true copy of the award and as it bears the signature of the umpire, it is a signed copy thereof.
It may be added that the words "now I hereby reproduce a true copy of the said award which is as follows" which appear at the beginning of the document and which are signed by the umpire Sri Dildar Hussain also in our opinion are sufficient to show that what was produced in court was a signed copy of the award as required by section 14(2).
In this view of the matter, it is unnecessary to consider the alternative argument raised on behalf of the appellant.
We therefore allow the appeal and set aside the orders of the courts below and, holding that a signed copy of the award has been filed as required by section 14(2), direct that further proceedings will be taken in the matter as required by law by the Subordinate Judge in whose court the signed copy of the award was filed.
Costs of this Court will abide the final result. | The appellant entered into a contract with the, Union of India for the construction of certain railway bridges.
On disputes arising the matter went to arbitration and then to an umpire.
After the umpire had made his award the appellant filed an application under section 14 of the Indian , praying that the umpire be directed to file the award or a signed Copy thereof in the terms of section 14(2).
The umpire filed in the Court a copy at the top of which he wrote : "now I hereby reproduce a true copy of the said award which is as follows.
" At the end of the copy of the award he wrote : "Certified as correct copy of the award dated 27th May 1961.
" Under this the umpire 's signature appeared.
It was objected by the Union of India before the court that the copy of the award so filed was not a "signed copy" of the award as required by section 14(2) but only a "certified copy".
The objection was upheld by the court and the appellants application for passing a judgment in terms of the award was dismissed.
A revision petition before the High Court failed.
The appellant then came to this Court by special leave.
HELD : When a document is an accurate or true, and full reproduction of the original it would be a copy.
In the present case what was produced by the umpire was a true accurate and full reproduction of the original.
It was therefore a copy of the original.
[845 H] It was also a signed copy because it bore the signature of the umpire.
A document must be signed in such a way as to make it appear that the person signing it is the author of it, and if that appears it does not matter what the form of an instrument is, or in what part of it the signature occurs.
The fact that the umpire wrote the words "certified as correct copy of the award dated the 27th May 1961" above his signature did not make any difference and the document was still a signed copy of the award.
If anything these words showed that the document filed was a true copy of the award.
[846 D, H; 847 A B] Mohesh Lal vs Busunt Kumaree, I.L.R. (1881) VI Cal.
340, relied on. |
Appeal No. 891 of 1964 Appeal by special leave from the judgment and decree dated October 30, 1961 of the Allahabad High Court in Letters Patent Appeal No. 83 of 1951.
N. C. Chatterjee, B. C. Mishra, B. R. G. K. Achar and M. V Goswami, for the appellant.
Chaman Lal Pandhi and section L. Pandhi, for the respondents.
The Judgment of the Court was delivered by Wanchoo, J.
This is an appeal by special leave against the judgment and decree of tie Allahabad High Court.
The appellant is a registered partnership carrying on business at Kanpur.
It entered into an agreement in December 1948 with the VijiaLakshmi Sugar Mills Limited, Doiwala, District Dehra Dun (hereinafter referred to as the Mills) and was appointed sole selling agent of the Mills.
According to the terms of the agreement, the appellant ,deposited a sum of Rs. 50,000/ as security for due performance of the contract, and this amount was to carry interest at the rate of Rs. 6/ per cent per annum to be paid by the Mills.
In November 1949 an order was passed.
winding up the Mills and this happened before the period of agency can* to an end.
Consequent on the winding up of the Mills, the appellant made an application in September 1950 by which it prayed for refund of security deposit along with interest.
It was also prayed that the Mills held the amount of deposit as trustee and in consequence the appellant was ,entitled to priority with respect to the amount of Rs. 50,000/ .
In addition, there was a claim of Rs. 24,500/ with respect to commission.
That claim was given up and we are now not concerned with it.
The liquidators admitted that there had been an agreement as alleged by the appellant and that a sum of Rs. 50,000/ had been deposited with the Mills.
But their case was that this amount was an 'Ordinary debt with respect to which the appellant could not claim any preference and thatt the appellant 's contention that the amount deposited was a kin 1 of trust with the Mills was not correct.
The only question that had to be decided therefore was whether the amount of Rs. 50,000/ deposited as security for due performance of the contract of sole selling agency was in the nature of a trust which was entitled to preference.
or was an ordinary, ,debt.
431 The learned Company Judge held on a construction of the agreement that the amount was an ordinary debt.
He referred in this connection to the apparent conflict between the decisions of the Calcutta and Madras High Courts on one side and the Allahabad and Bombay High Courts on the other but was of opinion that this conflict was largely illusory as the question whether the deposit in a particular case was in the nature of a trust or was an ordinary debt depended on the facts and circumstances of each case.
He finally held that the deposit in question was not In the nature of a trust and, was not entitled to any preference on that ground.
The appellant then went in appeal to, a Division Bench.
The Division Bench upheld the view taken by the learned Company Judge and dismissed the appeal.
The High Court having refused to grant a certificate, the appellant applied for an obtained special leave from this Court, and that is how the matter has come before US.
The two main terms of the agreement, viz. Nos. 8 and 9 bet ween the appellant and the Mills which call for consideration in the present case are these: "(8) That the firm has deposited sum of Rs. 50,000/with the said Mill as a security for the due performance of the contract on their part, on which amount the Mill shall pay interest to the said firm at the. rate of 6 per cent per annum. "(9) That the Mill shall refund the said security deposit of Rs. 50,000/ with interest thereon at the rate on termination of the agency.
In case he said amount is not refunded with interest thereon the firm shall be entitled to commission at the rates mentioned above as if agency has not terminated.
In other words as long as security with interest is not refunded and commission due is not paid this agreement will not be terminated.
" It may be mentioned that the agreement was for a period of one year which, as already indicated, had not expired before the winding up order was passed on November 8, 1949.
It will be seen from the terms of the agreement already set out: that there was no stipulation that the amount of Rs. 50,000/ deposited as security would be kept as a separate fund by the Miffs and it would not use it for its own purposes.
On the other hand,, it is clear that interest had to be paid and there was nothing in the agreement to prevent the Mills from using the money as its own so long as it paid interest on it.
It is true that the money was to be re funded along with interest on the,termination of the agency, but cl.
(9) further provided that in case the money was, not refunded after one year, the appellant would be entitled to commission as if 432 the agreement had not terminated.
As the agreement itself puts it, it will remain alive even after the period of one year so long as the security with interest was not refunded and the commission due was not paid.
The last words of cl.
(9) of the agreement put the security deposit and the commission due on the same footing.
It is because of this provision that the learned Company Judge held that as the security deposit and the commission due were put on the same footing and the commission could only be a debt, the security deposit in the circumstances of this agreement could not be treated on a higher footing.
It seems to us that the view taken by the learned Company Judge so far as this agreement is concerned (which was upheld by the Division Bench) is correct.
We may now refer to the apparent conflict between the Calcutta and Madras High Courts on one side and the Allahabad and Bombay High Courts on the other, on this question.
The representative cases on one side are: (i) Re: Alliance Bank. of Simla: Peter Donald Macpherson vs Dugald Mckechnie and others,(1) and (ii) In the matter of Travancore National and Quilon Bank Limited, Official Liquidators and other applicants (2).
On the other side the cases are (i) In re: Manekji Petit Manufacturing Company, Limited(3) and (ii) Maheshwari Brothers vs Official Liquidators(4).
The two Calcutta and Madras cases seem to take the view that where there is a deposit there is creation of some kind of trust even though the deposit may carry interest and the person with whom the deposit is made is entitled to use the money as his own.
It may however be mentioned that the Calcutta case was with respect to provident fund of the employees of a bank which went into liquidation while the Madras case was with respect to security deposit by an employee of a bank for due performance of his duties.
It may be added that such cases were later provided for specifically by the amendment of the Indian Companies Act (No. VII of 1913) which was made in 1936 and by which section 282 B was added to the Companies Act along with cl.
(e) in section 230(1) of the same Act.
Even so, these two cases make it clear that the proper approach to the question is to ask whether on the interpretation of the document, if there is one, or from proved or admitted facts and circumstances a trust is established or not.
if a trust is established, a provision for payment of interest by the trustee does not destroy the character of the trust nor does the fact that the money is not segregated.
The matter was again considered by the Calcutta High Court in Kshetra Mohan Das vs D. C. Basu(5) in connection with a deposit made by a sole, selling agent and the principle for deciding whether the deposit was in the nature of a trust or a loan was put thus:.
(1) XXVIII (3) A.I.R. 1932 Bom.
(2) (4) I.L.R. [1942] All.24.
(5) I.L.R. 433 "If the security deposit of an employee or an agent of a company in the hands of such company can be regarded as impressed with trust or held in a fiduciary capacity company then such employee or agent is entitled the whole of the security deposit even after such goes to liquidation. .
In the absence of or fiduciary relation the employee or the agent company in liquidation is merely a creditor of the and must share the assets pro rata with other There can in our opinion be no disagreement by such to get back company such trust of the company creditors.
There can in our opinion be no disagreement with the principle so enunciated, and the conclusion whether the deposit is in the nature of a trust or a loan will depend upon the facts,and circumstances of each case, particularly on the terms of the agreement if there is one in writing.
The difficulty however arises in the application of the principle to particular cases.
But the Calcutta and Madras High courts seem to lean to the view that where there is a security deposit it will generally be in the nature of a trust.
This brings us to the cases on the other side.
The Bombay High Court in Manekji Petit 's case(1) was 'also considering the case of a deposit by an agent.
It considered the terms of the agreement which provided for Rs. 6/ per cent interest.
Ordinarily the company was entitled to use the deposit as it thought fit, but there was a provision in the agreement that in the event of the company raising a loan secured by debentures of the company or by mortgaging company 's property, the moneys deposited by the agent were to be forthwith invested in Government securities and to be earmarked in some manner satisfactory to the agent.
It was held on the basis of this last clause in the agreement that there could be no trust till the contingency provided therein came to pass.
In that case that contingency had not come to pass and the moneys were mixed with the moneys of the company and used by it.
The Bombay High Court held that upto that stage there was no trust created.
In Maheshwarl Brothers(2), the question arose whether the security deposited by the agents for the fulfillment of their obligation under the agreement was impressed with trust.
The Allahabad High Court considered the agreement and came to the conclusion that as interest was provided and further as the company was entitled to use the deposit as its own and lastly because a floating charge was intended to be created on the assets of the company which failed for want of registration, the deposit was not in, the nature of a trust.
Thus absence of segregation and presence of interest coupled particularly with a,provision for a floating charge which had failed for want of registration inclined the court to hold that the deposit was not in the nature Of a trust.
(1) A.I.R. 1932 Bom.
Court./67 14 (2) I.L.R. [1942] All. 242. 434 It will thus be seen that the view of the learned Company Judge that the conflict between the Calcutta and Madras High Courts on one side and the Allahabad and Bombay High Courts on the other is more apparent than real is borne out by the fact that in each case the court considered the agreement to decide whether on the terms thereof and facts and circumstances of the case the deposit was impressed with a trust, though it must be admitted that the conclusion reached was not the same.
We are of opinion that the question whether the security deposit in a particular case can be said to be impressed with a trust will have to be decided on the basis of he terms of the agreement and the facts and circumstances of each case, without any leaning one way or the other on the fact that the 'money was given as a security deposit.
If the terms of the agreement, if it is in writing, clearly indicate that the deposit was in the nature of a trust, the court will come to that conclusion in spite of the fact that interest is provided for in the agreement.
But where the terms of the agreement do not clearly indicate a trust, the court will have to consider the facts and circumstances of each case along with the terms to decide whether in fact something in the nature of a trust was impressed on the security deposit.
In such a case the fact whether segregation was provided for or not would be one circumstance to be taken into consideration.
Where segregation is provided for the court would lean towards the deposit being in the nature of a trust.
But where segregation is not provided for and the deposit is permitted to be mixed up with the funds of the person with whom the deposit is made, the court may come to the conclusion that anything in the nature of trust was not intended, for generally speaking in view of section 51 of the Indian Trust Act, (No. 2 of 1882) a trustee cannot use or deal with the trust property for his own profit or for any other purpose unconnected with the trust.
It is true that where there is a clear trust and the trust deed if any provides that the trustee may use the trust property as he likes, the fact that the trustee can mix the trust property with his own may not make any difference.
But where there is no clear indication that a security deposit was impressed with a trust, absence of segregation would be a circumstance against there being a trust.
Another circumstance which may have to be taken into account in a case where the agreement does not indicate clearly that the security deposit is impressed with a trust is the payment of interest.
Where there is no payment of interest provided for an inference may be readily drawn that the deposit was in the nature of a trust.
But where the person with whom the deposit is made is to pay interest it may be possible to infer that payment of interest is a pointer towards there being no trust.
Further any other provision in the agreement and any other circumstance as to the manner in 435 which the deposit was dealt with may also have to be taken into account in coming to the conclusion whether the security deposit in a particular case was impressed with a trust or not.
We may now refer to some English and.
American cases in this connection.
In Gee vs Liddell(1) the facts and circumstances of the case were considered and it was held on those facts and circumstances that there was a trust.
In that cast pound 2,000 had been left as trust by a will, but the executor who was ', the son of the testator said that his father had intended to bequeath pound 3,000 and the question was whether the further pound.
1,000 was also a trust.
On the facts and circumstances of that case it was held that as the amount bequeathed (namely, pound 2,000) was certainly a trust, the addition of pound 1,000 to it by the executor would be of the same kind and would be equally impressed with trust.
That case also shows that where a trust can be inferred clearly a provision for payment of interest would be immaterial.
In re: Hallett 's Estate, Knatchbull vs Hallett(2) it was held that if a person held money in a fiduciary character but mixed it up with his own account, the person for whom the money was held could follow it and had a charge on the balance in the bankers ' hands.
This case again shows that the main question that courts have to decide in such cases is whether on the facts and circumstances a fiduciary relationship is established.
If it is established, then the fact that the money was mixed with the trustee 's money may not make any difference.
In re: Hallett & Co.,(3) segregation was the test used for the purpose of deciding whether there was trust or not.
In Frank M. McKey vs Maurcie Paradise,(4) the question arose with reference to a claim of an employee welfare association against the employer and it was held that without segregating any money as due to the association there could be no trust.
This case shows the significance of segregation in arriving at the inference whether there was a trust.
A consideration of these English and American cases also in our opinion shows that the first question in each case where the court is dealing with a security deposit is to ask whether on the agreement in writing, if any, and on the facts and circumstances of the case and.
conduct of the parties it can be said that the security deposit was unpressed with some kind of a trust.
If that can be said then the question whether interest was provided for and whether the trustee could mix the deposit money with his own money would not be of importance and would not take away the character of the deposit being impressed with a trust.
The mere fact that money was deposited as a security is not sufficient to come to the conclusion (1) ; (3) (2) (1879 80) XIII Ch.
D. 696.
(4) ; 436 that it must be treated as trust money.
The court will have to look to all the terms of the agreement if in writing and to the facts and circumstances of the case and to the conduct of the parties before coming to the conclusion whether with a trust.
If a trust can clearly be spelled out from the agreement that ends the matter.
spelled out clearly the fact there was for and the fact that interest was to be to show that the deposit was not impressed trust particularly where the person with whom the made could mix it with his own money and could use it In such a case the inference would be that the relationship the parties was that of a debtor and creditor.
Further these circumstances if there is any other term which a security deposit was impressed the terms of But if the trust cannot be no segregation provided paid would go a long way with the character of a deposit was for himself.
between besides suggests one kind of relationship rather than the other that will also have to be taken into account.
Illustrations of this will be found both in the Bombay case (i.e. in Manekji 's case(1) and in the Allahabad case (i.e., Maheshwari Brothers ' case(1).
In the Bombay case besides absence of segregation and presence of interest there was a further fact that in certain circumstances segregation had been provided for.
The court was entitled to take that fact into consideration and hold that the deposit was not impressed with trust till segregation took place.
In the Allahabad case a floating charge was created which failed for want of registration, and that circumstance was also used to show that the relationship between the parties was that of a debtor and creditor and not that of a trustee and beneficiary.
Let us now apply these principles to the facts of the present case.
The facts show that there was no segregation in this case and the Mills could mix the security deposit with its own money and use it for its own purpose.
Further because the Mills could use the money for its own purpose, it had to pay interest.
In addition to these two circumstances which would incline one to the view that the relationship was that of a debtor and creditor, there is the further fact that cl.
(9) of the agreement provides that even though the period fixed in the agreement would continue if the security deposit mission due is not paid.
We agree Judge that the last words in cl.(9) commission due on a par.
The commission other than a debt; the security deposit That is a further indication that the case was that of a debtor and creditor are of opinion that the High Court was commission due is not paid.
The agreement is not refunded and the commission with the learned Company make the security deposit and due can be nothing is put on a par with that relationship in the resent In the circumstances we right in its view as to the nature of the security deposit in the present case.
The appeal therefore fails and is hereby dismissed with costs.
G.C. Appeal dismissed.
(1) A.LR.
(2) LL.R. [1942] All. 242. | The appellant firm was appointed sole selling agent of a sugar manufacturing company and deposited Rs. 50,000 as security for due performance of the contract; this amount was to carry interest at 6 per cent per annum.
There was no restriction on the use of the said deposit by the, company.
According to cl.
(9) of the agreement the security and interest were to be refunded at the termination of the agency; in default of such payment the appellant firm was entitled to a commission as if agency had not terminated.
The clause further said that "as long as security with interest is not refunded and commission due is not paid this agreement will not be terminated.
" The company was ordered to be wound up before the period of agency came to an end.
Consequent on the winding up the appellant made an application praying for refund of its security deposit along with interest.
It was contended that as the company held the amount of deposit as a trustee the appellant was entitled to priority among the creditors.
On behalf of the liquidators it was denied that the amount deposited was in the nature of a trust entitled to preference over other debts.
The company judge held that he amount was an ordinary debt.
The Division Bench of the High Court also decided against the appellant.
In appeal by special leave to this ' Court.
HELD:The deposit did not amount to a trust.
The question whether the security deposit in a particular case can be said to be impressed with a trust will have to be decided on the basis of the terms of the agreement and the facts and circumstances of each case, without any leaning one way or the other on the fact that the money was given as a., security deposit.
[434 C] If a trust can clearly be spelled out from the terms of the agreement that ends the matter.
But if the trust cannot be spelled out clearly the fact that there was no segregation provided for, and the fact that interest was paid, would go a long way to show that the deposit was not impressed ' with the character of a trust particularly when the person with whom the deposit was made could mix it with his own money and could use it for himself.
In such a case the inference would be that the relationship between the parties was that of a debtor and creditor.
Further besides these circumstances, if there is any other term which suggests one kind of ' f relationship rather than the other that will also have to be taken into account.
[436 B C] In the present case the company was free to use the money for its own purpose and had to pay interest on it.
Further, in cl.
(9) of the agreement the security was put on a par with the commission which was nothing but a debt.
The courts below had therefore rightly treated the security deposit as an ordinary debt.
[436 F] Peter Donald Macpherson vs Dugald Mckechine and Ors.
XXVIII In the matter of Travancore National and 430 Quilon Bank Limited, Official Liquidators and Another Applicants, , In re Manekji Petit Manufacturing Company Ltd. A.I.R. 1932 Bom.
31 1, Maheshwari Brothers vs Official Liquidators, I.L.R. [1942] All. 242, Keshetra Mohan Das vs D. C. Basu, I.L.R. Gee vs Liddell, ; , Knatchbull vs Hallett, (1879 80) XIII Ch.
D. 696.
In re Hallett & Co., and Frank M.Mckey vs Maurcie Paradise, ; , referred to. |
Appeal No. 225 of 1965.
Appeal by special leave from the judgment and order dated September 6, 1962 of the Madhya Pradesh High Court in Misc.
Civil Case No. 108 of 1958.
I.N. Shroff, for the appellant.
S.T. Desai, section N. Andley, Rameshwar Nath, P. L. Vohra, and Mahinder Narain, for the respondent.
225 The Judgment of the Court was dilevered by Sikri, J.
This appeal by special leave is directed against the judgment of the High Court of Madhya Pradesh in a reference made to it under section 46 of the Gwalior War Profits Tax Ordinance, Samvat 2001 hereinafter called the Ordinance.
Three questions were referred to the High Court by the War Profits Tax Commissioner, but we are only concerned with question No. 1, which reads as follows: "Whether the dividend income of Rs. 11,09,332/received from the Binod Mills was chargeable under the War Profits Tax?" When the reference was first heard by the High Court three contentions were raised by M/s Binodram Balchand of Ujjain, respondents before us, hereinafter referred to as the assessees.
They were: "(1) The assessees did not deal in shares and their holdings in the Binod Mills Limited were purely in the nature of investments, having no connections with their business as defined in Section 2(5) read with Rule 1 of Schedule 1, of the Gwalior War Profits Tax Ordinance.
The business of the secretaries, treasurers and agents of the Binod Mills Limited, which was carried on by them did not require any holding of the shares of the company and was not dependent on their investment in the said company.
(2)The dividend income accrued or arose from the profits of the Binod Mills Limited, and as the Ordinance applied to the business carried on by this company, the dividends were excluded under the explanation to Rule 3(1) of Schedule 1.
(3)The dividend income should be considered as income of the full accounting period, i.e., from Diwali of 1943 to Diwali of 1944 and should be apportioned on that basis".
The High Court by its judgment dated April 19, 1957, accepted the first contention of the assessees and accordingly answered the question in their favour.
It did not deal with contentions Nos. 2 and 3.
The Commissioner appealed to this Court and this Court by its judgment dated December 20, 1961, set aside the judgment of the High Court and answered the first contention in relation to question No. I against the assessees and remanded the case to the High Court for the consideration of the other two contentions with reference to that question.
The High Court on remand accepted the second contention of the assessees and answered question No. 1, set out above, in favour of the assessees.
The Commissioner having obtained special leave, the appeal is now before us for disposal.
226 A few facts may be given in order to appreciate the point that has. been argued before us.
The assessees were, at the relevant time, the Managing Agents of the Binod Mills Ltd., Ujjain, which was a private limited company carrying on the business of manufacturing and selling textile goods in 1944.
The Ruler of the Gwalior State promulgated the Gwalior War Profits Tax Ordinance, Samvat 2001, for the purpose of imposing tax on excess profits arising out of certain businesses.
The Ordinance came into force on July 1, 1944, and applied originally to the counting period falling within the period commencing on July 1, 1944, and ending on June 30, 1945.
By virtue of a notification the period was extended to June 30, 1946.
The assessees carried on the Managing Agency business during the aforesaid period in Gwalior State and being liable to be assessed to war profits submitted a return for the period commencing from July 1, 1944, to October 16, 1944.
It appears that Rs. 11,09,332/ was received by the assessees on July 5, 1944, on account of dividend on shares of the Binod Mills for the year 1943.
The assessees inter alia contended before the War Profits Tax Officer that this sum was not liable to be charged.
The War Profits Tax Officer, however, by order dated July 9, 1951, in.; clouded this sum of Rs. 11,09,132/ in the taxable income and his view was upheld in appeal by the Appellate Assistant Commissioner and the Commissioner.
As stated above, the Commissioner, at the instance of the assessees, referred three questions, including the one with which we are concerned, to the High Court.
It appears that before the High Court the learned counsel for the Commissioner did not seriously dispute the contention of the assessees that the dividend income which the assessees had received was exempted by the Explanation to r. 3 of Schedule 1 of the Ordinance.
The rule as it existed originally was as follows: "3(1) Income received from investments shall be included in the profits of a business liable to the War Profits Tax, unless it is proved to satisfaction of the War Profits Tax Officer that the investments have no connec tion whatever with the business.
(2)In the case of business which consists wholly or mainly in the dealing in or handling of investments, income received from investments shall be deemed to be profits of that business, and in the case of a business, a specific part only of which consists in dealing in investments, the income received from investments held for the purposes of that part of the business shall be deemed to be profits of that part of the business".
227 By section 2 of the Gwalior War Profits Tax (Amendment) Ordi nance, Samvat 2002 hereinafter referred to as, Ordinance 2002, r. 3 of the First Schedule to the Ordinance was amended as follows: "In rule 3(2) of the First Schedule to Ordinance the following shall be added, namely: Explanation "The income from investments to be included in the profits of the business under the provisions of this rule shall be computed exclusive of all income received by way of dividends or distribution of profits from a company carrying on a business to the whole of which the Section of the Ordinance imposing the War Profits Tax applies", This Ordinance was promulgated on February 28, 1946.
Another Ordinance called the Gwalior War Profits Tax (Amendment) Ordinance, Samvat 2004 hereinafter referred to as Ordinance 2004 was promulgated on September 6, 1947.
This Ordinance amended the Explanation to sub rule (2) of rule 3 of Schedule 1 as follows "In the explanation of sub rule (2) of Rule 3 of Schedule 1 of the Gwalior War Profits Tax Ordinance, Samvat 2001 a comma is added after the words "from a company carrying on a business" and before the words "to the whole of which" and shall be always deemed to be there from the date from which the said Ordinance came into force".
The High Court felt no difficulty in holding that the expla nation applied, and that on its plain terms the dividend income which the assessees received from the profits of Binod Mills Ltd. was not liable to be included in the taxable income.
The High Court observed: "The language of the explanation is very plain, and it means that if income is received by way of dividends or profits from a company carrying on a business, to the whole of which the section of the Ordinance imposing the War Profits Tax applies, then the income has to be excluded in the assessment to War Profits Tax of the assessee receiving that income.
The object of the explanation is clearly to avoid double taxation.
Here it is not disputed that the dividend income which the assessee received was from the profits of the Binod Mills Limited and the Mills were subject to the burden of the War Profits Tax under the Ordinance.
That being so, the explanation in terms applies to the case, and the assessee is entitled to claim that the dividend income of Rs. 11,09,332/ received from Binod Mills could not 228 be included in the computation of its profits for the purposes of War Profits Tax and was consequently not chargeable under the War Profits Tax Ordinance.
Learned Advocate General appearing for the State did not dispute this position".
Mr. Shroff, the learned counsel for the Commissioner, contends, first, that the explanation was not in existence at the relevant time, and, therefore, cannot be taken into consideration; secondly, that the explanation is an explanation to r. 3(2) and not to r. 3(1) and, therefore, cannot be used to explain r. 3(1).
Mr. Shroff complains that the High Court was wrong in thinking that the explanation formed part of Ordinance 2001, as it was originally promulgated.
The High Court seems to have been under this impression because in the order refusing leave to appeal to this Court the High Court observed: "There was no omission at all on our part to consider the question whether the explanation was prospective or not.
Indeed, this question was never raised by the learned Advocate General, appearing for the Department and it was rightly not raised as the Explanation was not added subsequent to the promulgation of the Ordinance and the very basis of the assessment of the income of the assessee was that rule 3 of Schedule 1 of the Ordinance together with the Explanation applied to the income received by the assessee during the period from 1st July 1944 to 16th October 1944".
It seems that Ordinance 2002 and Ordinance 2004 were not placed before the High Court and for this reason it assumed that the explanation was not added subsequent to the promulgation of the Ordinance.
But even if it was added subsequently, in our opinion, the explanation applies to the computation of the profits of the chargeable accounting period July 1, 1944 to October 16, 1944.
If we read Ordinance 2002 and Ordinance 2004 together the legislative intention to make the explanation retrospective becomes clear.
Apart from Ordinance 2004, it would have been very arguable that the explanation inserted by Ordinance 2002 was retrospective because it dealt with the computation of profits and would apply to all computation of profits made by the Taxing authorities after February 28, 1946.
But we need not go into this question because Ordinance 2004 expressly assumes that the explanation was in existence from the date when the Ordinance came into force and no other meaning can be given to section 2 of Ordinance 2004 because by deeming that the comma shall be deemed to be there from the date from which the Ordinance came into force it expressly assumes that the explanation was also in force from that date.
Accordingly we are not inclined to 229 accept the first contention of Mr. Shroff and we must hold that the explanation applies to the computation of profits of the chargeable accounting period July 1, 1944 to October 16, 1944.
Regarding the second contention, Mr. Shroff says that Ordi nance 2002 expressly provides that the explanation shall be added in r. 3(2) of the First Schedule to the Ordinance.
He further says that this explanation is referred in Ordinance 2004 as "explanation of sub rule (2) of rule 3 of Schedule 1".
There is no doubt that Ordinance 2002 did purport to add this explanation to r. 3(2) but it seems to us that if we look at the language of the explanation it was meant to be an explanation not only to r. 3(2) but to r. 3(1) also.
First, the words "the income from investments to be included in the profits of the business under the provisions of this rule" are comprehensive and include income from investments both under r. 3(1) and r. 3(2).
Secondly, there is no reason why any distinction should have been made between investments mentioned in r. 3(1) and investments mentioned in r. 3(2).
Rule 3(1) is general and deals with all investments from profits of all businesses and would include investments mentioned in r. 3(2).
Rule 3(2) deals with investments of a certain business, i.e., business which consists wholly or mainly in the dealing in or holding of investments.
We have not been able to appreciate why, if Mr. Shroff is right, was it necessary to distinguish between income from investments mentioned in r. 3(1) and income from investments mentioned in r. 3(2).
At any rate, the language of the explanation is quite clear and it seems to us that by the words "in rule 3(2) of the First Schedule to the Ordinance, the following shall be added" what was really meant was to add the explanation below r. 3(2).
In the result we agree with the High Court that the answer to the question referred should be in the negative.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed. | The assessee was the managing agent of a Textile Mill in Uj jain.
In 1944, the Gwalior State promulgated the Gwalior War Profits Tax Ordinance.
In 1946, by the Gwalior War Profits Tax (Amendment) Ordinance, an Explanation was added after r. 3(2) of the First Schedule to the Ordinance of 1944.
In 1947, another Amendment Or dinance was promulgated whereby a comma was inserted in the Explanation.
In July 1944.
the assesses received about Rs. 11 lacs as dividend on its shares in the Textile Mill.
The War Profits Tax Officer included the amount in the assessee 's taxable income, and the order was upheld by the Appellate Assistant Commissioner and the Commissioner.
On the question: whether the dividend income was chargeable to war profits tax, the High Court held, on a reference, that the Explanation applied and that under the Explanation the dividend income was not liable to be included in the assessee 's taxable income.
In appeal to this Court, it was contended that the Explanation was not applicable, because, (i) it was not retrospective; and (ii) it was only an Explanation to r. 3(2) and not to r. 3(1) which was the rule applicable to the assessee.
HELD:The Explanation applies to the computation of the pro fits of the chargeable accounting period, because: (i) the Ordinance of 1947 expressly assumes that the Explanation was in existence from the date when the War Profits Tax Ordinance came into force in 1944; and (ii) on the language of the Explanation it was meant to be an Explanation not only to r. 3(2) but also to r. 3(1).
By the words "in r. 3(2) the following shall be added", in the amending Ordinance of 1946, all that was meant was that the Explanation should be added below r. 3(2).
[228 H 229 E] |
ed Case No.7 of 1987 In Transfer Petition No. 390 of 1986.
Dr. Y.S Chitale, T .U. Mehta and R.P. Kapur for the Petitioners N.N. Keshwani, R.N. Keshwani, Ms. Madhu Moolchandani and K. Rajendra Chodhary for the Respondents.
The Judgment of the Court was delivered by SEN, J.
The principal question in controversy in this petition under article 226 of the Constitution filed by the Hindustan Petroleum Corporation Ltd., a Government of India undertaking, which has been transferred from the High Court of Bombay to this Court under article 139A Of the Constitution, is whether the petitioner is entitled to the protection of PG NO 48 section 15A of the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947, introduced by Maharashtra Act No. 17 of 1973 read with section 5 of the Esso (Acquisition of Undertakings in India) Act, 1974.
Put very briefly, the essential facts are these.
The Esso Eastern Inc., a company organised and existing under the laws of the State of Belaware, U.S.A., was carrying on, in India the business of distributing and marketing petroleum products manufactured by Esso Standard Refining Company of India Ltd., and Lube India Ltd. and had, for that purpose, established places of business in India.
The company had taken several fiats in the Metropolitan City of Greater Bombay and elsewhere for accommodating their employees including Flat No.35 in Block No.8 in the housing colony known as Shyam Niwas situate at Warden Road, now called Bhulabhai Desai Road, Bombay on leave and licence basis for a period of one year in terms of an agreement in writing dated 26th November, 1968 from Smt.
Nanki M. Malkani.
respondent No. 2 herein.
On 4th December.
1968 respondent No 1 Shyam Co operative Housing Society Ltd. passed a Resolution admitting petitioner No. 2 T.J. Nansukhani, and employee of the company as a nominal member of the society though he was not the licensee The company on 16th January, 1970 exercised the option of renewal of the licence for another year i.e. till 30th November 1970.
On 29th November, 1971, respondent No. 2 Smt.
Nanki M. Malkani addressed a letter to the company intimating that the agreement for leave and licence was due to expire on that date and accordingly the period of the said licence was renewed, yearly, from time to time to time years on the expiry of each term of licence i.e. on 30th November, 1972 and 30th November, 1972 and 30th November, 1973.
In the meanwhile, the State Legislature of Maharashtra enacted Act No. 17 of 1973.
The amendment Act also made consequential changes to which we shall presently refer.
Undoubtedly, the Esso Standard Inc. was in occupation of the flat in question as on 1st February, 1973 and thus acquired the status of a tenant under section 15A of the Act.
On 13th March.
the Esso (Acquisition of Undertakings in India) Act, 1974 was brought into force.
As from that date.
the Central Government by virtue of sub section
(1) of section 5 of the Act was deemed to be the tenant of the flat in question.
On 9th April.
1975, respondent No. 2 Smt.
Nanki M. Malkani sent a communication to the petitioner affirming the terms and conditions of the licence.
Again, on 24th March 1975, she addressed a letter confirming that she had given the aforesaid flat to Esso Eastern Inc. in December 1968 on leave and licence basis and the petitoner PG NO 49 being the successor in tittle of that company had been occupying the flat as licensee on the same terms and conditions.
On 11th September, 1980, the society passed a resolution calling upon the petitioner Corporation to vacate the said premises and directing that respondent No. 2 Smt.
Nanki M. Malkani should herself occupy the flat.
Upon failure of the Corporation to vacate the premises, the society on 15th September, 1980 filed an application under section 9I(I) of the Maharashtra Co operative Societies Act, 1960 before the 3rd Co operative Court, Bombay for eviction of the petitioner and its employee.
On 7th January, 1981, petitioner No. I permitted another employee to occupy the flat.
The 3rd Co operative Court, Bombay after consideration of the evidence adduced by the parties, by its well reasoned judgment dated 6th June, 1983 dismissed the claims of the society holding inter alia that Esso Eastern Inc. was in occupation of the flat in dispute under a subsisting licence as on 1st February, 1973 and thus got the protection available to a licensee under section I5A of the Bombay Rent Act and the said protection could not be taken away merely by the society making a claim for eviction under section 91(I) of the Act.
Aggrieved, the society went up in appeal to the Maharashtra State Co operative Appellate Court which by its judgment dated 17th March, 19X4 allowed the appeal and decreed the claim of the society requiring petitioner No. 1 Hindustan Petroleum Corporation Ltd. to vacate Flat No. 35 in Block No. 8 of the society building with a further direction that respondent No. 2 Smt.
Nanki M. Malkani should occupy the flat in question herself.
I hereupon, the petitioner moved the High Court under article 226 of the Constitution for an appropriate writ, direction or order for quashing the impugned judgment and order passed by the Maharashtra State Co operative Appellate Court.
This petition mainly raises three questions.
They are [1] Whether the Hindustan Petroleum Corporation Limited being a successor in interest of the Esso Eastern Inc. the licensee, was entitled to the protection of section 15A of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, introduced by the Maharashtra Act No. 17 of 1973, having regard to the fact that the Esso Eastern Inc. was in occupation of the flat in dispute under a subsisting licence as existing on 1st February 1973 (2) Whether the Maharashtra State operative Appellate Court was justified in holding that a licence being purely personal.
upOn acquisitiOn of the Esso Eastern Inc. by the Central Government under the Esso (Acquisition of Undertakings in India) Act, 1974, the agreement for leave and licence as existing on the appointed day i.e. 13th March, 1974 under section 2 (a) of that Act, stood extinguished and therefore the right acquired by Esso PG NO 50 Eastern Inc. under section 15A of the Bombay Rent Act of being a protected tenant in relation to the flat in question, could not stand transferred to, or be vested in, the Central Government under section 3 of the Acquisition Act.
Was it also justified in holding that although the Esso Eastern Inc. was deemed to be a tenant of the disputed flat under section 15A of the Bombay Rent Act, the Central Government could not be deemed to have become the tenant thereof under sub section
(I) of section 5 of the Acquisition Act merely because prior to the enactment of section ISA of the Bombay Rent Act the premises were held by Esso Eastern Inc. on an agreement for leave and licence? (3) Whether a claim for ejectment of an occupant of a flat in a cooperative housing society having been let into possession of the premises under an agreement for leave and licence executed between it and a member of the society, by virtue of its employee having become a nominal member thereof, is a 'dispute touching the business of the society ' within the meaning of section 9 (1) of the Act.
In the view that we take on the first two questions, there is no need to answer the third which is already covered by the decision of this Court in O N. Bhatnagar vs Smt.
Rukibai Narsindas & Ors.
[ ; The statutory provisions bearing on these questions are set out below.
The relevant provision in sub section
[I] of section 91 of the Act, prior to its amendment, provided: "91 (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the parties to the dispute . .to the Registrar if both the parties thereto are one or other of the following: (a) a society (b) a member, past member or a person claiming through a member . .
The definition of the term 'landlord ' as contained in section 5(3) of the Bombay Rent Act was amended to include in respect of a licensee deemed to be tenant by section 15A, the licenser who has given such licence '.
The expression licensee ' as defined in sub section
(4A) thereof introduced by the Amending Act, insofar as material, reads as follows: "(4A) 'licensee ', in respect of any premises or any part thereof, means the person who is in occupation of the pre PG NO 51 mises or such part, as the case may be, under a subsisting agreement for licence given for a licence fee or charge ' and includes any person in such occupation of any premises or part thereof in a building vesting in or leased to a cooperative housing society registered or deemed to be registered under the Maharashtra Cooperative Societies Act, 1960; but does not include a paying guest, a member of a family residing together, a person in the service or employment of the licensor etc; . and the expressions "licence", "licenser" and "premises given on licence ' shall be construed accordingly.
" Sub section
(1) of section 15A of the Bombay Rent, as introduced by the Maharashtra Act No. 17 of 1973 provides: '15A(1).
Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any contract, where any person is on February 1. 1973 in occupation of any premises, or any part thereof which is not less than a room, as a licensee he shall on that date be deemed to have become, for the purposes of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his occupation.
" Sec.
28(1) of the Act insofar as material reads.
"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 this provision be within its jurisdiction.
(a) in Greater Bombay, the Court of Small Causes Bombay, [aa] [b] 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 PG NO 52 or question arising out of this Act or any of its provisions and . no other court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question.
" We must then refer to the relevant provisions of the Esso Eastern Inc. The avowed object and purpose of the Esso (Acquisition of Undertakings in India) Act, 1974, as reflected in the long title is to provide for the acquisition and transfer of the right, title and interest of Esso Eastern Inc., the foreign company, in relation to its undertakings in India with a view to ensuring co ordinated distribution and utilisation of petroleum products distributed and marketed in India by Esso Eastern Inc. and for matters connected therewith or incidental thereto.
The preamble to the Act is in these terms: "Whereas Esso Eastern Inc. a foreign company, is carrying on, in India, the business of distributing and marketing petroleum products manufactured by Esso Standard Refining Company of India Limited and Lube India Limited, and has, for that purpose, established places of business at Bombay and other places in India; And whereas it is expedient in the public interest that the undertakings, in India, of Esso Eastern Inc. should he acquired in order to ensure that the ownership and control of the petroleum products distributed and marketed in India by the said company are vested in the State and thereby so distributed as best to subserve the common good;" Section 3 of the Act provides: "3. Transfer and vesting in the Central Government of the undertakings of Esso in India On the appointed day, the right, title and interest of Esso, in relation to its undertakings in India, shall stand transferred to and shall stand in, the Central Government.
The Act received the assent of the President on the 13th March, 1974 and published on that day became the appointed day, as defined in section 2(a) of the Act.
Sub section
( 1) of section 5 provides: "5.
Central Government to be lessee or tenant under certain circumstances (l) Where any property is held in India by Esso under any lease or under any right of tenancy PG NO 53 the Central Government shall on and from the appointed day, be deemed to have become the lessee or tenant, as the case may be, in respect of such property as if the lease or tenancy in relation to such property had been granted to the Central Government, and thereupon all the rights under such lease or tenancy shall be deemed to have been transferred to and vested in the Central Government." Section 7(1) provides that, notwithstanding anything contained in sections 3 4 and 6, the Central Government may, if it is satisfied that a Government company is willing to comply, or has complied, with such terms and conditions as that Government may think fit to impose direct, by notification, that the right, title and interest and the liabilities of Esso in relation to any undertaking in India shall, instead of continuing to vest in the Central Government, vest in the Government company either on the date of the notification or on such earlier or later date (not being a date earlier than the appointed day) as may be specified in the notification.
The Act makes provision that if there was any dispute with regard to what is vested in the Central Government, the proper forum was the Central Government for taking a decision.
19 of the Act reads as under: "19.
Power to remove difficulties If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act.
remove the difficulty; Provided that no such order shall be made after the expiry of a period of two years from the appointed day.
" In exercise of the powers conferred by sub s.(l) of section 7 of the Act, the Central Government, in the Ministry of Petroleum & Chemicals issued a notification No. GSR 131(F.) dated 14th March 1974.
that on being satisfied that Esso Standard Refining Company of India Limited? a Government company, is willing to comply with the terms and India imposed by the Central Government, hereby directs that the right, title and interest and the liabilities of Esso Eastern Inc., in relation to its undertakings in l ndia, shall, instead of continuing to vest in the Central Government.
vest, w.e.f.
the 15th day of March, 1974, in Esso Standard Refining Company of India Limited.
Indubitably.
as on the appointed day i.e. 13th March, 1974 PG NO 54 under section 2(a) of the Acquisition Act, the Esso Eastern Inc. had acquired the status of a protected tenant under section 15A of the Bombay Rent Act and the tenancy rights so acquired in relation to the flat in question stood transferred to, and became vested in, the Central Government.
By virtue of the aforesaid notification issued under section 7(1) of the Act, the rights of tenancy in the 13 flat in question instead of continuing to vest in the Central Government became vested in Esso Standard Refining Company of India Limited, a Government of India undertaking, w.e.f.
15th March, 1974.
It is also necessary to mention that the Central Government held, in the name of the President, 74% of the equity share capital of the Esso Standard Refining Company of India Limited, which therefore became a Government company as defined by section 617 of the .
On 12th July, 1974 the Company Law Board, in exercise of the powers conferred by sub sections
(1) and (2) of section 396 of the , read with the notification of the Government of India in the Department of Company Affairs No. GSR 443(E) dated 18th October, 1972, made Lube India Limited a Esso Standard Refining company of India Limited (Amalgamation) Order, 1974.
(3) of the said Order provided that as from the appointed day, the undertaking of Lube India Limited shall stand transferred to, and vest in, Esso Standard Refining Company of India Limited.
As a result of the amalgamation of the two companies, the name of Esso Standard Refining Company of India Limited was changed to Hindustan Petroleum Corporation Limited.
It is therefore evident that petition No. 1 Hindustan Petroleum Corporation Limited, a Government of India undertaking, is a successor in interest of Esso Eastern Inc. which acquired the status of a deemed tenant under section ISA of the Bombay Rent Act, which right devolved on the Central Government under section 6(1) of the Acquisition Act.
Upon these facts and the statutory provisions, the 3rd Cooperative Court rightly concluded as under: "Thus, it is clear that there was a subsisting licence in favour of opponent No. 3 as on 1.2.73.
The definition 'Licensee ' as given in Section 5(4A) of the Rent Act includes inter alia a person in occupation of premises of a co operative housing society.
PG NO 55 My findings on this issue are that the opponent No. 3 has a right to the premises against opponent No. 1 as protected tenant under Section 15A of the Rent Act.
" In dealing with the question, it observed: "The Supreme Court has clearly observed that the protection given to a licensee under a valid licence as on 1.2.73 under Act 17 of the amended Rent Act is available to a licensee of any premises or any part thereof in a building vesting in or leased to a co operative housing society.
This protection given to a licensee in the position mentioned above cannot be taken away merely by the society filing the case against the member and occupant for reliefs to the opponent member.
The provisions of the two legislations are to be harmoniously interpreted and such harmonious interpretation is possible.
In case the occupant of a premises gets protection under section 15A of the Rent Act against the member, the society can implement the provisions of section 2( l6) of the Maharashtra Co operative Societies Act, 1960 by determining the rights of the member and admitting a new member for the premises.
Hence, my finding on the second part of the issue are that the rights of opponent No. 3 cannot be determined without determining the rights of opponent No. I i.e. Nanki M. Malkani, a co partner member in the suit premises.
" In view of these findings, the 3rd Co operative Court held in favour of the petitioner corporation and dismissed the claim for eviction filed by the society under section 9( l) of the Act.
Curiously enough, while allowing the appeal, the State Appellate Court has observed as follows: "One thing is clear that Hindustan Petroleum took over the rights and liabilities of Esso Standard Eastern Co. We would like to point out that leave and licence agreement confers only a personal right to occupy . that right cannot be transferred nor it can be inherited by Hindustan Petroleum Corporation by virtue of the merger of Esso Company with Hindustan Petroleum Corporation.
Under these circumstances it has to be noted that as soon as the Esso PG NO 56 Standard Eastern Co. was taken over by Hindustan Petroleum Corporation, the rights under the leave and license agreement came to an end . . it cannot be said that it (Hindustan Petroleum Corporation) also took over the rights of Esso Standard Eastern Co. to occupy the flat under the leave and licence agreement.
Again it observed: " At P. 299 of the record there is a letter dated 24.3.80 written by respondent No. 1 to the personal adviser of Hindustan Petroleum Corporation Ltd. In the first para of the said letter it is stated by respondent No. 1 that he has given the suit that to Esso Standard Eastern Inc. in December 1968 on leave and licence basis and that Hindustan Petroleum Corporation is the successor in title of the Esso Company and that Hindustan Petroleum Corporation is occupying the said flat: Probably in ignorance of this legal position, the respondent No. I wrote the above mentioned letter dated 24.
3.80 to Hindustan Petroleum Corporation .
Even supposing that respondent No. I intended that respondent No. 3 should continue as a licensee after Esso Standard Eastern Co. was taken over by respondent No. 3 it has to be noted that there was no separate leave and licence agreement with Hindustan Petroleum Corporation namely.
respondent No. 3.
Even assuming for the sake of argument that respondent No. I intended that the flat should be occupied on leave and licence basis by respondent No. 3 that leave and licence agreement was terminated by respondent No. I by the above mentioned letter.
" Further, it observed: "However there is absolutely no evidence to show the licence was renewed, at any time.
The evidence of the witness examined on behalf of respondent No. 2 clearly shows that there was no renewal of the leave and licence agreement respondent No. 3 the leave and licence agreement automatically came to an end . .under these circumstances we feel that the rights that were given under PG NO 57 the leave and licence agreement were not available to respondent No. 3" Dr. Y.S. Chitale, learned counsel appearing for the petitioners rightly contends that the findings reached by the Appellate Court are manifestly erroneous and have caused a grave miscarriage of justice.
The finding that there was no subsisting licence existing as on 1st February, 1973 to attract the provisions of section 15A of the Bombay Rent Act in the case of the petitioner Corporation is vitiated by its failure to give effect to the admission contained in the letter dated 24th March, 1980 written by respondent No. 2, Smt.
Nanki M. Malkani which is to the effect: "I had given the above flat to the then Esso Standard Inc. in December 1968 on leave and licence basis.
You as a successor in title of that company have been occupying the flat as licensee on the same terms and conditions.
As you and your predecessors in title are reputed organisation I had given the flat for your officers use in the expectation that you will return the flat.
when l require it for my own use.
" Besides this letter, the learned counsel for the petitioners drew our attention to a sheaf of letters exchanged between respondent No. 2 Smt.
Nanki M. Malkani and the Hindustan Petroleum Corporation Ltd. showing that she accepted that there was subsisting agreement of leave and licence as late as 24th March, 1980 which must be necessary implication, give rise to the inference as to the existence of such a licence between its predecessor Esso Eastern Inc. as on 1st February, 1973 which conferred on it the status of a protected tenant under section 15A of the Act.
Indeed, the correspondence shows that it was at the behest of respondent No. 2 that every time on the expiry of a term of licence it came to be renewed from year to year till section 15A of the Bombay Rent Act was brought into force.
Thereafter, the predecessor in interest of the petitioner, corporation was deemed to be her tenant under section I5A of the Bombay Rent Act.
For instance, by letter dated 9th April, 1975 she wrote to the Hindustan Petroleum Corporation Ltd. that the above flat had been in its possession since December 1, 1968.
Again, by letter dated 15th November, 1976, she wrote to the Corporation forwarding the original bill of the society in support of her demand for payment of enhanced taxes and PG NO 58 charges.
In view of these admissions made in these letters and more particularly in the letter dated 29th November, 1971 to Esso Eastern Inc. which reads as under: "As the present agreement of leave and licence in regard to above flat is due to expire on 30th November, 1973 that is two years from hence, you would like me to give you an undertaking of renewal of this agreement to justify the expenditure being incurred by you now," the findings of the Appellate Court are clearly erroneous.
On the other hand, it stands proved that Esso Eastern Inc. had acquired the status of deemed tenant or protected licensee under section 15A of the Bombay Rent Act as on 1st February, 1973.
The findings of the Appellate Court to the contrary are therefore clearly erroneous.
We are unable to sustain the view taken by the Appellate ' Court in not giving effect to sub section
[1] of section 5 which vested the tenancy rights in relation to the flat in question on the Central Government as from appointed day.
While it is true that a licence being personal is not capable of being transferred; there was no warrant for the assumption by the Appellate Court that the licence stood extinguished with the acquisition of the right, title and interest of Esso Eastern Inc. under section 3 of the Acquisition Act.
That Act came into force on 15th March, 1974 and in the meanwhile, the licensee Esso Eastern Inc. had already acquired the status of deemed tenant under section 15A of the Bombay Rent Act admittedly, there was a subsisting licence as on 1st February, 1973.
The Appellate Court has also failed to appreciate that the name of Esso Eastern Inc. was changed to Esso Eastern Inc. by a Certificate of Amendment dated/22nd December, 1970 vide a Resolution passed by the Board of Directors of the Corporation on 15th December, 1970.
In view of all this, the finding of the Appellate Court that the Hindustan Petroleum Corporation Ltd. was entitled to the protection of section 15A of the Bombay Rent Act clearly borders on traversity and can hardly be swtained.
The Appellate Court was clearly in error in not appreciating that section by 4. 3 of the Acquisition Act, the right, title and interest of Esso Eastern Inc. in relation to its undertakings in India, shall stand transferred to, and shall vest in, the Central Government as from the appointed day i.e. as from 13th March.
Under sub section
(I) of section 5 thereof, the Central Government became the lessee or tenant, as the case may be.
By sub section
(2) thereof, on the expiry of the term of any or tenancy refereed to in sub section
(1), such lease or tenancy shall, if PG NO 59 so desired by the Central Government, be renewed on the same terms and conditions on which the lease or tenancy was held by Esso immediately before the appointed day.
By a notification issued on the next date, the right, title and interest of the Central Government became vested in Esso Standard Refining Company of India Ltd., a Government company, w.e.f. 15th March, 1974.
Furthermore, by reason of Lube India and Esso Standard Refining Company of India Ltd. Amalgamation Order, 1974 made by the Company Law Board under section 396 [1] & (2) of the , the undertaking of Lube lndia Ltd. vested in Esso Standard Refining Company of India Ltd. and immediately upon such transfer, the name of Esso Standard Refining Company of lndia Ltd., stood changed to Hindustan Petroleum Corporation Ltd. In the premises, petitioner No. 1 Hindustan Petroleum Corporation Ltd. is clearly protected under section 15A of the Bombay Rents, Hotel and Lodging House Rates Control Act.
In that view of the matter, we do not think it necessary to deal with the contention as regards the applicability of section 91 of the Maharashtra Cooperative Societies Act, 1960.
All aspects arising out of the submissions as to the jurisdiction of the Registrar under section 91(1) of the Act have already been considered by this Court on O.N. Bhatnagar 's case and we reiterate the principles laid down therein.
In the result, the petition under article 226 of the Constitution succeeds and is allowed.
I he judgment and order passed by the Maharashtra State Co operative Appellate Court dated June 6, 1983 allowing the claim of respondent No. 1 Shyam Co operative Housing Society for eviction of the petitioners as also the proceedings initiated by it under section 91 of the Maharashtra Co operative Societies Act.
1960 are quashed.
Y. Lal Petition allowed. | The Esso Eastern Inc., a Company Organised and existing under U. section Laws was engaged in the business of distributing and marketing petroleum products manufactured by Esso Standard Refining Co. of India Ltd. and Lube India Ltd. and had established places of business in India.
In order to provide residential accommodation to its employees the Co. had taken on leave and licence basis, Flat No. 35 in Block No. X in the Housing Colony known as Shyam Niwas situate at Warden Road now called Bhulabhai Desai Road, Bombay, for a period of one year in terms of the agreement in writing dt.
28th Nov., 1968 from one Smt.
Nanki M. Malkani, a member of the Co operative Society.
On 4th Dec., 1968 Respondent No. 1 Shyam Cooperative Housing Society Ltd. passed a resolution admitting Petitioner No. 2 T.J. Mansuknani an employee of the Co. as a nominal member of the Society though he was not the licencee.
The period of lease was initially renewed at the instance of the licensor for one year.
On 29th Nov., 1971, Ms. Malkani wrote a letter to the Company saying that the agreement for lease and licence was due to expire on that date; hence the period of licence be renewed yearly, from time to time for 3 years on the expiry of each term of the licence.
On this basis the lease period stood extended till Nov. 30, 1973.
In the meanwbile the State of Maharashtra enacted Act 17 of 1973.
Since the Esso Standard Inc. was in fact in occupation of the flat in question as on 1st Feb., 1973, it acquired the status of a tenant under PG NO 44 PG NO 45 section 15A of the Act.
On 13th March, 1974, the Esso (Acquisition of Undertakings in India) Act, 1974 came into force and from that date by virtue of subsection (1) of section 5 of the Act, the Central Govt.
was deemed to be the tenant of the flat in question.
By a letter of 9th April, 1975, sent by Ms. Malkani Res. 2, to the Petr.
she affirmed the terms and conditions of the licence and by her subsequent communications she informed that the Petr.
who is successor in interest of Esso Eastern Inc. to whom she had given the flat continues in possession on the same terms and conditions of the lease.
On 11th Sept., 1980, the Society passed a resolution calling upon the Petr.
Corporation to vacate the premises and asked Ms. Malkani, Res. 2 for occupying the flat herself.
Upon the Petitioner 's failure to vacate the premises the Society on September 15, 1986 filed an application under section 91(1) of the Maharashtra Co operative Society Act 1960 before the 3rd Co operative Court Bombay, for eviction of the petitioner and its employee.
On January 1981, Petitioner No. 1 permitted its another employee to occupy the flat.
The 3rd Cooperative Court after considering evidence led by the parties, dismissed the claim of the Society holding inter alia that Esso Eastern Inc. was in occupation of the flat in dispute under a subsisting licence as on Feb. 1, 1973 and thus got the protection available to a licencee under sec.
15A of the Bombay Rent Act and that the said protection could not be taken away merely by the Society making a claim for eviction u/s 91 [1] of the Act.
The Society being aggrieved appealed to the Maharashtra State Co operative Appellate Court.
The appellate Court took the view that leave and licence agreement confers only a personal right to occupy; that right cannot be transferred nor inherited by the Hindustan Petroleum Corpn., being successor in interest of Esso Eastern Inc. In that view of the matter the appellate Cooperative Court held that the Petitioner Corpn.
cannot be said to have taken over the right vt Esso Eastern Inc. to occupy the flat under the leave and licence agreement.
Accordingly it allowed the appeal filed by the Society and decreed the claim of the Society and directed the Petr.
Hindustan Petroleum Corpn.
to vacate the premises in question and further directed Res. 2, Ms. Malkani to herself occupy the flat.
The Petitioner thereupon filed a Writ Petition under Article 226 of the Constitution for quashing the judgment PG NO 46 and order passed by the Maharashtra State Co operative Appellate Court.
The said Writ Petition was withdrawn to this Court under Article 139A of the Constitution.
In the Writ Petition 3 questions have been raised viz (1) Whether the Hindustan Petroleum Corporation Ltd. being a Successor in interest of the Esso Eastern Inc. the licensee, was entitled to the protection of section 15A of the Bombay Rents, Hotels and Lodging House Rates Control Act, 1947, (Maharashtra Act 17 of 1973) having regard to the fact that Esso Eastern Inc. was in occupation of the flat in dispute under a subsisting licence as existing on 1st February, 1973? (2) Whether the Maharashtra State Co operative Appellate Court was justified in holding that the licence being purely personal and upon acquisition of the Esso Eastern Inc. by the Central Government under the Esso (Acquisition of Undertakings in India) Act 1974 the agreement for leave and licence as existing on the appointed day i.e. D 13th March, 1974 under section 2(a) of that Act, stood extinguished and therefrom the right acquired by Esso Eastern Inc. under section 15A of the Bombay Rent Act of being a protected tenant in relation to the flat in question, could not be transferred to, or be vested in the Central Government under section 3 of the Acquisition Act.
Further was it also justified in holding that although the Esso Eastern Inc. was deemed to be a tenant of the disputed flat under section 15A of the Bombay Rent Act, the Central Government could not be deemed to have become the tenant thereof under Sub section
(1) of section 5 of the Acquisition Act merely because prior to the enactment of section 15A of the Bombay Rent Act the premises were held by Esso Eastern Inc. on an agreement of leave and licence? (3) Whether a claim for ejectment of an occupant of a flat in a cooperative housing society having been let into possession of the premises under an agreement for leave and licence executed between it and a member of the Society, by virtue of its employer having became a nominee member thereof is a "dispute touching the business of the Society" within the meaning of section 91(1) of the Act? Allowing the Petition (which stood transferred from the High Court to this Court) the Court, HELD: Petitioner No. I Hindustan Petroleum Corporation Ltd. is clearly protected under section 15A of the Bombay Rents, Hotel and Lodging House Rates Control Act 1947.
[47G 1{; 48A] PG NO 47 That Act came into force on March 15, 1974 and in the meanwhile, the licencee Esso Eastern Inc. had already acquired the status of deemed tenant under section 15A of the Bombay Rent Act as admittedly, there was a subsisting licence as on 1st February, 1973.
The appellate Court has also failed to appreciate that the name of the Esso Standard Refining Co. of India Ltd. was changed to Esso Eastern Inc. by a certificate of Amendment dated December 22, 1970 vide a Resolution passed by the Board of Directors of the Corporation on 15th December, 1970.
[58D E] The appellate Court was clearly in error in not appreciating that under section 3 of the Acquisition Act, the right, title and interest of Esso Eastern Inc. in relation to its undertakings in India, shall stand transferred to, and shall vest in the Central Government as from the appointed day i. e. as from 13th March, 1974.
Under Sub section
(1) of section 5, thereof, the Central Government became the lessee or tenant, as the case may be.
By sub section
(2) thereof, on the expiry of the term of any lease or tenancy referred to in sub section
(1) lease or tenancy, shall, if so desired by the Central Government, be renewed on the same terms and conditions on which the lease or tenancy was held by Esso immediately before the appointed day.
[158F, 59A] O.N. Bhatnagar vs Smt.
Rukibai Narsingdas & Ors.
, ; , referred to. |
Appeals Nos. 491 and 492 of 1965.
Appeals by special leave from the order , dated September 17, 1963 of the Bombay High Court Nagpur Bench in Letters Patent Appeals Nos. 14 and 15 of 1963, 93 section V. Gupte, Solicitor General and I. N. Shroff, for the appellant (in C.A. No. 491 of 1965).
A. G. Ratnaparkhi, for the appellants (in C.A. No. 492 of 1965).
Bishan Narain, M. L. Kapur and I. section Sawhney, for the respondents Nos. 1 and 2 (in C.As.
Nos. 491 and 492 of 1965).
N. Shroff, for respondent No. 1 (in C.A. No. 492 of 1965).
The Judgment of the Court was delivered by Bachawat, J.
The question in issue in these appeals is whether certain employees of the Nagpur Electric Light & Power Co. Ltd.
,am employees within the meaning of section 2(9) of the (34 of 1948).
The company and the employees filed two separate applications before the Employees ' Insurance Court under section 75 of the Act for the determination of the question.
Their case is that out of the five categories of staff mentioned in appendices 1 to 5 to the company 's petition, those connected with the receiving station and workshop (appendices 1 and 2) were employees within the meaning of section 2(9), but those connected with the engineering, stores and outdoor work, meter,consumers and allocation departments and administration (appendices 3, 4 and 5) were not such employees.
The Regional Director, Employees State Insurance Corporation contested the applications, but he admitted that the workers of the categories mentioned in items 5 to 14 of appendix 4 and items 1, 7 and 8 of appendix 5 were not employees within the meaning of section 2 (9).
The Employees Insurance Court found that those workers and also the workers mentioned in item 12 of appendix 5 were not such employees.
The correctness of this finding is not in issue in these appeals and we express no opinion on it.
The categories of workers mentioned in appendix 111, items 1 4 in appendix TV and items 2 6 and 9 11 of appendix V are as follows 'Appendix III Mains Senior : (1) assistant engineers, (2) supervisors, (3) electricians, (4) overseers.
Mains junior : (1) cable jointers, (2) mistries, (3) sub mistries, (4) lineman H.T.O.H. mains, (5) mains coolies, (6) mains coolies temporary, (7) wireman temporary, (8) sub mistries, (9) sub station attendants.
Clerical staff : (1) clerk to asstt.
engineers, (2)draughtsman, (3) mains office peons.
Stores department : (1) storekeeper, (2) asstt.storekeeper, (3) clerks, (4) coolies.
94 Motor car staff : (1) motor drivers, (2) motor cleaners.
Mason.
Appendix IV Meter senior & junior : (1) deputy meter superintendent, (2) senior meter mechanic, (3) junior meter mechanic, (4) meter testers.
Appendix V (2) accounts (department accountant, chief cashier, asstt.
accountant, account clerks.
(3) Time keeping department : group head, clerks, (4) Filing department : group head, clerks.
(5) Typing department : steno typists, typists.
(6) Telephone operators.
(9) Record keeper and daftari.
(9a) Station clerk.
(10) Motor car staff : mechanic, drivers, cleaners.
(11) Menial staff : peons, garden malies, chowkidars, sweepers, rejas temporary.
" The, Employees Insurance Court held that the aforesaid workers were employees within the meaning of section 2 (9) of the Act.
The company and the employees filed two separate appeals from this decision to the High Court of Bombay (Nagpur Bench) under section 82 of the Act.
Abhayankar, J. affirmed the finding of the Employees Insurance Court and dismissed the appeals.
Letters Patent appeals from his orders were summarily dismissed by a Bench of the High Court.
The company and the employees have now preferred two separate appeals to this Court by special leave.
The Nagpur Electric Light & Power Co., Ltd., occupies cer tain premises at Kamptee Road, Nagpur where it carries on the work of transforming and transmitting electrical energy. 'Me premises are located within a compound wall.
Inside the premises there are several buildings, yards and open spaces.
The receiving station, the workshop, the meter testing department, the engineers ' quarters, the general office, and stores are in different buildings inside the premises.
The company does not generate electricity.
It maintains a receiving station inside the premises where it receives electrical energy in bulk from the generating station of the Maharashtra Electricity Board at Khapparkheda.
The energy when received is of 11,000 volts.
From the receiving station, the energy is either carried through electric supply lines to a transformer and is stepped down to 3,300 volts and is then carried to the sub stations in the city where it is again stepped 95.
down to 400 volts by other transformers, or is carried from the receiving station to sub stations where it is stepped down directly from 11,000 to 400 volts.
From the sub stations, the energy is transmitted by electric supply lines and distributed to consumers.
The first question is whether the company maintains a factory and if so, where its factory is located.
The applies in the first instance to all factories other than seasonal factories [s.1(4)] and may be extended to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise [s.1(5)].
2(12) defines a factory.
The relevant part of that section reads : "Sec.2(12) : " 'factory ' means any premises including the precincts thereof whereon twenty or more persons are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the Indian Mines Act, 1923 or a railway running shed; The expressions 'manufacturing process ' and 'power ' shall have the meanings respectively assigned to them in the ." Any premises including the precincts thereof (excepting a mine and a railway running shed) constitute a factory if (1) 20 or more persons are working or were working thereon on any day of the preceding 12 months, and (2) in any part thereof a manufacturing process is being carried on with the aid of power.
If these two conditions are satisfied, the entire premises including the precincts thereof constitute a ' factory, though the manufacturing process is carried on in only a part of the premises.
The premises constituting a factory may be a building or open land or both, see Ardeshir H. Bhiwaniwala vs The State of Bombay(1).
Inside the same compound wall, there may be two or more premises; the premises used in connection with manufacturing processes may constitute a factory, and the other premises within the same compound wall may be used for the purposes unconnected with any manufacturing process and may form no part of the factory.
Sections 2(g) and (k) of the , define power and manufacturing process.
They are in these terms : 2(g).
" 'power ' means electrical energy, or any other form of energy which is mechanically transmitted and is not generated by human or animal agency;" (1) 96 2(k). ""manufacturing process ' means any process for (i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or (ii) pumping oil, water/or sewage, or (iii) generating, transforming or transmitting power; or (iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels.
" In view of section 2 (k) (iii), the process of transforming electrical energy from a high to a low potential and the process of transmitting the energy through supply lines are both manufacturing processes.
In a part of the premises occupied by the company, the two processes are carried on with the aid of power by means of electrical gadgets and other devices.
On the premises more than twenty persons were and are working.
No part of the premises is used for purposes unconnected with the manufacturing process The premises therefore constitute a factory within the meaning of section 2(12) of the .
The High Court said: "This manufacturing process is carried on by the Company not only in the building called the workshop or the receiving station but over the whole area over which the process of transmission is carried on including the sub stations where electricity is stored and supplied to the consumers by further transmission lines.
Thus every part over which this process is carried on will be a factory within the meaning of the .
" We cannot accept this line of reasoning.
It seems to us a startling proposition that every inch of the wide area over which the transmission lines are spread is a factory within the meaning of section 2(12). "A factory must occupy a fixed site", see Halsbury 's Laws of England, 3rd ed., Vol. 71 ,article 15, p. 15.
The company 's factory has a fixed site.
It is located inside the Kamptee Road 97 and its boundaries are fixed by the compound wall of the premises The next question is whether the members of the staff of the categories mentioned in appendix 111, items 1 4 of appendix IV and items 2 6 and 9 11 of appendix V to the company 's petition am employees within the meaning of section 2(9) of the .
It is common case that these workers are employed on remuneration which in the aggregate does not exceed four hundred rupees a month.
Section 2(9) is in these terms " employee ' means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services am so lent or let on hire has entered into a contract of service; but does not include (a) any member of the Indian naval, military or air forces or; (b) any person employed on a remuneration which in the aggregate exceeds four hundreds rupees a month; " The definition of employee in section 2(9) may be contrasted with that of a worker in section 2 (1) of the , which is in these terms 98 worker ' means a person employed, directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process;" It is to be seen that the definition of an employee in the is wider than that of a worker in the .
The object of the is to secure the health, safety, welfare, proper working hours, leave and other benefits for workers employed in factories.
The benefit of this Act does not extend to field workers working outside the factory, see the State, of Uttar Pradesh vs M. P. Singh(1).
The object of the is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependents ' benefits to their dependants.
The benefit of this Act extends inter alia to the employees mentioned in section 2 (9) (i) whether working inside the factory or establishment or elsewhere.
The definition of "employee" in section 2 (9) deals with three classes of employees.
We are concerned with the class of employees mentioned in section 2 (9) (i).
The courts below concurrently found and in our opinion, rightly, that all the workers of the disputed categories are persons employed for wages in or in connection with work of the company 's factory and are directly employed by the company on work of or incidental to or connected with the work of the factory.
Some of them do the work in the factory and some work elsewhere, but they are all employees within the meaning of section 2 (9) (i).
Take the case of the workers mentioned in appendix 111.
The assistant engineers, supervisors, electricians, and overseers are engaged in the erection and maintenance of the electricity supply lines connected with transmission of power.
The cable jointer, mistries, linemen, coolies and wiremen are employed for inspection of the supply lines, digging pits, erecting poles for laying distribution mains and service lines.
The masons attend to the masonry work of the buildings.
The attendants in charge of the sub stations look after the transformation and transmission of power.
The motor drivers and cleaners are employed for carrying materials and tower ladders in trucks for maintenance of the supply lines.
The clerks, draughtsmen and main office peons help the assistant engineers.
The store keepers and clerks with The assistance of coolies issue stores to all the departments and keep accounts relating to stock.
The deputy meter superinten dent, meter mechanics and meter testers mentioned in items 1 to 4 of appendix IV attend to the testing calibration and repairs of (1) ; 99 the meters.
Let us now take the case of the staff mentioned in items 2 to 6 and 9 to II of appendix V.
The clerks in the accounts, time keeping and filing departments are employed to maintain accounts, attendance registers, muster rolls, pay sheets, typing, filing and dispatching documents required in connection with all the departments including the receiving station and the workshop.
The telephone operators attend to the telephone calls for all the departments.
The menial staff is required to do mis cellaneous work including the cleaning of the office compound.
The motor car staff is employed to look after the cars employed in the administration section.
All these employees, clerical or otherwise, are employed in connection with the work of the factory, that is to say, in connection with the work of transforming and transmitting electrical power.
Some of the employees are clerks; they are not engaged in manual labour.
But a person doing non manual work can be an employee within the meaning of s ' 2 (9) (i) if he is employed in connection with work of the factory.
The duties of the administrative staff are directly con nected with the work of the factory.
The case of the Employees ' State Insurance Corporation, Bombay vs Raman(1) is distinguishable.
In that case a company had a factory and an administrative office.
The office was situated in a building which was situated within the same compound in which the factory was located.
The entire compound was surrounded by one compound wall.
It was found that the work of the factory began with the collection of raw materials and ended with the production of finished articles and the work of selling the products was not connected with the work of the factory.
The administrative office handled sales of.
the products manufactured in the factory as well as goods imported from abroad.
The factory and the administrative office maintained separate muster and wage rolls and separate accounts.
In these circumstances, it was held that the clerks employed in the administrative office, whose work consisted mainly of taking down dictations from the manager and other officers and typing out letters, were not em ployees within the meaning of section 2(9).
The facts of the present case are entirely different.
The company maintains one establishment for its factory.
The factory does the work of transforming and transmitting electrical energy.
All the workers in question including the clerks and the administrative staff are engaged in connection with this work.
None of them is employed in any separate establishment unconnected with the work of the factory.
Some of the employees work outside the factory, but their duties are connected with the work of the factory.
They are therefore employees within the meaning of section 2 (9) (i).
Some are (2) 100 employed in the sub stations.
It is common case that the stations are not independent factories.
The sub stations attendants attend to work which is directly connected with the of the factory at the main station.
They are therefore employees within the meaning of section 2 (9) (i).
In the result the appeals are dismissed with costs.
One hear fee.
G.C Appeals dismissed. | The appellant company carried on the work of transforming And transmitting electrical energy.
There was dispute between the company and the respondent whether certain employees of the company like engineers, draughtsmen, clerks, accountants etc.
mentioned in Appendices III, IV and V of the company 's petition before the Employees ' Insurance Court, were 'Employees ' or not within the meaning of section 2(9) of the Employees Insurance Act, 1948.
The Employees Insurance Court held the said workers to be employees under section 2(9) and this finding was confirmed by the Single Judge as well as the Division Bench of the High Court.
The company appealed to this Court by special leave.
HELD : (i) The premises of the company were a factory within the meaning of the Employees State Insurance Act but the High Court was wrong in laying down the proposition that every inch of the area over which the transmission lines were spread was a factory within the meaning of section 2(12).
The company 's factory had a fixed site and was located within the compound wall of its premises.
[96 E, H] (ii)All the employees of the disputed categories clerks or otherwise were employed in connection with the work of the factory, that is to say, in connection with the work of transforming and transmitting electrical power.
Some of the employees were not engaged in manual labour.
But a person doing non manual work can be an employee within the meaning of section 2(9) (i) if he is employed in connection with the work of the factory.
The duties of the administrative staff are directly connected within the work of the factory.
[99 C, G] Even those employees who worked outside the factory but whose duties were connected with the work of the factory were employees within the meaning of section 2(9)(i).
Among such employees were to be included those attending to sub stations of the factory.
[100 A] Ardeshir H. Bhiwaniwala vs The State of Bombay, [1961] 3 S.C.R.542, State of Uttar Pradesh vs M. P. Singh, ; and Employees ' State Insurance Corporation, Bombay vs Raman, referred to. |
Appeal No. 26 of 1966.
Appeal from the judgment and order dated October 28, 1964 of the Punjab High Court in I. T. Reference No. 28 of 1962.
section K. Mitra, Gopal Singh, section P. Nayyar and R. N. Sachthey,.
for the appellant.
Veda Vyasa and B. N. Kirpal, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
At the instance of the Commissioner of Income Tax,, the Appellate Tribunal, Delhi Bench "C", referred the following question "Whether the cost of land is entitled to depreciation under the schedule to the Income tax Act alongwith the cost of the building standing thereon.?" 182 This question arose out of the following facts : The respon dent, M/s Alps Theatre, hereinafter referred to as the assessee, carries on business as exhibitor of films.
The Income Tax Officer initiated proceedings under section 34(1)(b) of the Indian Income Tax Act, 1922, on the ground that in the original assessment depreciation was allowed on the entire cost of Rs. 85,091/ , shown as cost ,of the building which included Rs. 12,000/ as cost of land.
The Income Tax Officer, by his order dated February 22, 1959, recomputed the depreciation, excluding cost of land.
The assessee ap pealed to the Appellate Assistant Commissioner.
The Appellate Assistant Commissioner upheld the order of the Income Tax Officer.
The assessee then appealed to the Appellate Tribunal which accepted the appeal.
In accepting the appeal it observed as follows : "You cannot conceive of a building without the land beneath it.
It is not possible to conceive of a building without a bottom.
What Section (10) (2) (vi) of the Act says is that depreciation will be allowed on the building.
The word "building" itself connotes the land upon which something has been constructed.
It was, therefore, wrong on the part of the authorities below to exclude the value of the land upon which some construction was made.
The true meaning of the word 'building ' means the land upon which some construction has been made.
The two must necessarily go together.
" The High Court answered the question referred to it against the Department.
Mahajan, J., observed that in Section 10(2)(vi) of the Income Tax Act, a building is placed at par with machinery and furniture and is treated as a unit, and, therefore, for the purposes of depreciation a building cannot be split up into building material and land.
He further observed that if the Legislature wanted to exclude land from the building for purposes of depreciation it could have said so.
He then added : "Moreover, depreciation is allowed on the capital.
The capital here is a unit building.
If later on it is sold and it fetches more than its written down value the surplus is liable to tax [see in this connection Section 10(2) (vii) proviso.]" He felt that "the crux of the matter is that the building is treated as a unit for purposes of depreciation or repair, and there is no warrant in the Act which would permit us to split the unit for the purposes of section IO." He further felt that at any rate two equally plausible interpretations are possible and the one in favour of the assessee should be adopted.
183 Dua, J., in a concurring judgment, felt that the question was not free from difficulty, but he answered the question in favour of the assessee on the ground that much could be said for both points of view and the view in support of the assessee 's submission had found favour with the Tribunal which had not been shown to be clearly erroneous.
The answer to the question depends upon the true interpreta tion of section 10(2)(vi), and in particular whether the word "building" occurring in it includes land.
Section 10 deals with the profits and gains derived from any business, profession or vocation.
Section 10(2) provides that such profits or gains shall be computed after making certain allowances.
The object of giving these allowances is to determine the assessable income.
The first three allowances consist of allowance for rent paid for the business premises, allowance for capital repairs and allowance for interest in respect of capital borrowed.
Sub clauses (iv), (v), (vi), (vi a) and (vii) of section 10(2) deal with allowances in respect of buildings, machinery, plant or furniture.
The word "building" must have the same meaning in all these clauses.
Sub clause (iv) runs as under : "in respect of insurance against risk of damage or destruction of buildings, machinery, plant, furniture,stocks or stores, used for the purpose of the business,profession or vocation, the amount of any premium paid.
" "Building" here clearly, it seems to us, does not include the site because there cannot be any question of destruction of the site.
Clause (v) reads : " in respect of current repairs to such buildings, machinery, plant or furniture, the amount paid on account thereof.
" This again cannot include the site.
Then we come to sub cl.
(vi), the relevant portion of which reads as under : "in respect of depreciation of such buildings, machinery, plant or furniture being the property of the assessee, a sum equivalent . as may in any case or class of cases be prescribed.
" It would be noticed that the word used is "depreciation" and "depreciation" means : a decrease in value of property through wear, deterioration, or obsolescence the allowance made for this in book keeping, accounting, etc." (Webster 's New World Dictionary ').
In that sense land cannot depreciate.
The other words to notice are "such buildings".
We have noticed that in sub cls.
(iv) and 184 (v), "building" clearly means structures and does not include site.
That this is the proper meaning is also borne out by r. 8 of the Indian Income Tax Rules, 1922.
Rule 8 has a schedule, and as far as buildings are concerned, it reads as under : Class of asset Rate per Remarks centage 1.Buildings (1) First class substantial buildings of materials. 2.5 Double these numbers (2)Scond class building will be taken for factory of less substantial con 5 buildings excluding struction. offices,godowns,officer 's (3)Third class building 7.5 and employees quarters.
of construction infeior to that of second class building,but not inclu ding purely temporory erection.
(4) Purely temporary No rate is prescribed: erection such as wooden renewals will be allowed structure.
as revenue expenditure.
The rate of depreciation is fixed on the nature of the structure.
If it is a first class substantial building, the rate is less.
In other words, first class building would depreciate at a much less rate than a second class building.
It would be noticed that for purely temporary erections, such as wooden structures, no rate of depreciation is prescribed and instead renewals are allowed as revenue ex penditure.
But if the contention of the respondent is right, some rate for depreciation should have been prescribed for land under the temporary structures.
Further it would be difficult to appreciate why the land under a third class building should depreciate three times quicker than land under a first class building.
One other consideration is important.
The whole object of section 10 is lo arrive at the assessable income of a business after allowing necessary expenditure and deductions.
Depreciation is allowable as a deduction both according to accountancy principles and according to the Indian Income Tax Act.
Why '? Because otherwise one would not have a true picture of the real income of the business.
But land does not depreciate, and if depreciation was allowed it would give a wrong picture of the true income.
The High Court relied on Corporation of the City of Victoria and Bishop of Vancouver Island(), but in our view this case is distinguishable and gives no assistance in determining the meaning of the 'word 'buildings ' in the context of section 10(2)(vi).
In this case the Privy Council had to construe section 197(1) of the Municipal Act, British Columbia, which exempted from municipal rates and taxes (1) [1912] 1 2 A.C. 384.
185 "every building set apart and in use for the public worship of God." The Privy Council held that the above exemption applied to the land upon which a building of the description mentioned above was erected as well as to the fabric.
The Privy Council was not concerned with the question of depreciation but with the question of exemption from Municipal rates.
In the result the appeal succeeds, the judgment of the High Court set aside and the question referred is answered in the negative and against the assessee.
In the circumstances there will be Y.P Appeal allowed. | The Revenue authorities did not allow depreciation on the cost of land alongwith the cost of building standing thereon.
The Appellate Tribunal accepted the assessee 's appeal and the High Court answered the question in favour of the assessee.
In appeal to this Court by the Revenue: HELD: The appeal must be allowed.
Building under section 10(2), does not include the site because there cannot be any question of destruction of the site.
[183 E] The word used in section 10(2)(vi) is "depreciation" and "depreciation" means "a decrease in value of property through wear, deter oration, or obsolescence, and allowance made for this in book keeping, accountings etc." In that sense land cannot depreciate.
[183 H] By r. 8 of the Indian Income tax Rules the rate of depreciation is fixed on the nature of the structure.
It would be difficult to appreciate why the depreciation of land would be dependant on the class of structures.
[184 D E] The whole object of section 10 is to arrive at the assessable income of a building after allowing necessary expenditure and deductions.
If depreciation on land was allowed it would give a wrong picture of the true income.
[184 F G] Corporation of the City of Victoria and Bishop of Vancover , distinguished. |
91 of 1956.
Petition under article 32 of the Constitution of India for enforcement of fundamental rights.
section P. Sinha, Shaukat Hussain, E. Udayarathnam and section section Shukla, for the petitioners.
N. section Bindra, R. H. Dhebar and T. M. Sen, for the respondents Nos. 1 to 4. 1961.
March 22.
The Judgment of the Court was delivered by 532 SARKAR, J.
One Abdul Hai died about 1943.
He left certain immovable properties.
He had three wives and children by each.
One of his wives predeceased him.
On his death the wives and children, surviving him, succeeded ' to these properties in certain shares.
One of the surviving wives and a daughter died subsequently.
It appears that the remaining wife of Abdul Hai and his six children by her, went to Pakistan but the time when they did so does not appear.
It is not however disputed that they had become evacuees and their shares in the properties could be properly declared evacuee property.
A notice under section 7 of the was in fact issued for the purpose of declaring these persons evacuees and their shares in the properties, evacuee property.
Proceedings were taken pursuant to the notice and on August 14, 1952, an order was made declaring the migrants evacuees and a 4/7th share in certain properties, evacuee property as belonging to them.
Thereafter other proceedings were taken under , and an order was made on March 23, 1954, under section 11 of this Act vesting the entirety of the properties referred to in the order of August 14, 1952 in the Custodian of Evacuee Properties, Bhopal.
This petition under article 32 of the Constitution challenges the validity of the orders of August 14, 1952, and March 23, 1954, as violating the petitioners ' fundamental right to hold property, to wit, their shares in the properties covered by the orders.
It is presented by the surviving children of Abdul Hai by his two deceased wives, excepting Abdul Aziz.
Abdul Aziz however has been made a respondent to the petition but is not opposing it.
It is not in dispute that the petitioners and Abdul Aziz never became evacuees and are entitled to undivided shares in the properties declared to have vested in the Custodian in their entirety.
The petition is opposed by the other respondents, namely, the Government of India and various officers concerned with the Acts, and it will be convenient to describe them alone as the respondents.
533 The first question raised is as to the validity of the order dated August 14, 1952, made under the Act of 1950.
It is said that the order is a nullity as the notice under section 7 of this Act on which it was based, was bad for the reason that it was issued to Abdul Aziz who was, admittedly, not an evacuee.
It seems to us that it is unnecessary to decide this question for it is not a matter with which the petitioners are in any way concerned.
The proceedings under that Act did not purport to affect their interest in the properties and they cannot, therefore, challenge the order made under it.
Further, as we have earlier said, it is not in dispute that the shares of the surviving wife of Abdul Hai and her children in the properties could properly be declared evacuee property under the Act since they had migrated to Pakistan.
The order of August 14, 1952, only declared what purported to be their shares, to be evacuee property.
By such a declaration no right of the petitioners is affected.
The second question raised concerns the order of March 23, 1954, made under the Act of 1951.
This order vests the entirety of certain properties left by Abdul Hai including the petitioners ' shares in them, as evacuee property and, therefore, clearly affects the petitioners.
We think that the petitioners ' grievance against this order is of substance and the order as it stands cannot be sustained.
This order was made under section 11 of the Act of 1951.
This Act was passed "to make special provisions for the separation of the interests of evacuees from those of other persons in property in which such other persons are also interested": see the preamble to the Act.
It creates an officer called the "Competent Officer" for effecting such separation.
The disputed order was made by such an officer.
Section 2(d) defines "composite property", which, so far as is material, is in these terms: section 2(d).
"composite property" means any property which, or any property in which, an interest has been declared to be evacuee property or has vested in the Custodian under the (XXXI of 1950) and 534 (i) in which the interest of the evacuee consists of an undivided share in the property held by him as a co sharer or partner of any other person, not being an.
evacuee; or (ii) in which the interest of the evacuee is subject to mortgage in any form, in favour of a person, not being an evacuee; or (iii) in which the, interest of a person, not being an evacuee, is subject to mortgage in any form in favour of an evacuee; or. .
Section 2(b) defines a "claim" as follows: section 2(b): "Claim" means the assertion by any per person, not being in evacuee, of any right, title or interest in any property (i) as a co sharer or partner of an evacuee in the property; or (ii) as a mortagagee of the interest of an evacuee in the property; or (iii) as a mortgagor having mortgaged the property or any interest therein in favour of an evacuee;. . .
Section 6 authorises a Competent.
Officer to issue, "for the purpose of determining or separating the evacuee interest in a composite property", notices requiring persons claiming interest in any composite property, to submit their claims to him.
Section 7 deals with the procedure, the form and the time of making the claims.
Section 8 lays down that on receipt of a the Competent Officer shall make an enquiries in the manner provided and pass an order determining the interest of the evacuee and the claimant in the property.
It, also provides that the order shall contain, among others, the following particulars: (1) in any case where the evacuee and the claimant ire co sharers or partners, their respective shares in the property and the money value of such shares; (2) in any case where the claim is made by a mortgagor, the amount due to the evacuee; and (3) in any case, where the claim is made by a mortgage, the amount due under the claim in accordance with the provisions of section 9. 535 Sub section (2) of section 8 is in these terms: section 8(2): Where the Custodian under the (XXXI of 1950), has determined that the property in question or any interest therein is evacuee property, the decision of the Custodian shall be binding on the competent officer: Provided that nothing contained in this sub section shall debar the competent officer from determining the mortgage debt in respect of such property or any interest therein or from separating the interest of the evacuee from that of the claimant under section 10.
Claims by mortgagees over evacuee properties are dealt with by section 9.
Section 10 gives the Competent Officer power to separate the interests of the evacuee from those of the claimant.
It provides that the Competent Officer "in particular may: (a) in the case of any claim of a co sharer. (i) direct the custodian to pay to the claimant the amount of money assessed in respect of his share in the composite property or deposit the same in a civil Court having jurisdiction over such property and deliver possession of the property to the Custodian and the claimant may withdraw the amount in deposit in the civil Court; or (ii) transfer the property to the claimant on payment by him of the amount of money assessed in respect of the share of the evacuee in the property; or (iii) sell the property and distribute the sale proceeds, thereof between the Custodian and the claimant in proportion to the share of the evacuee and of the claimant in the property; or (iv) partition the propert y according to shares of the evacuee and the claimant and deliver possession of the shares allotted to the evacuee and the claimant to the Custodian and the claimant respec tively;. .
Then comes section 11 which, in certain circumstances, vests the entire property in a Custodian.
It was under this section that the order now being considered 536 was passed and it will be convenient to set it out later.
It is said on behalf of the respondents that notices under section 6 of the Act of 1951, both general and special,.
the latter addressed to the petitioners, asking for submission of claims in respect of the properties had been issued but no claim was submitted by any one.
The learned counsel for the respondents produced a copy of one of such notices which was in ' the form set" out below: "Subject: 105.10 acres agricultural land and one house in village Junapari Tahsil Berosia (4/7 share of Abdul Aleem etc.
evacuees) To Shri Abdul Aziz and his two brothers village Junapani (Tahasil Berosia).
FORM 'C ' WHEREAS information has been received that you have an interest in the composite property described in the Schedule hereto annexed.
AND WHEREAS the evacuee interest in the said property is to be separated from other interests.
I, NOW, hereby call upon you to submit your claim to me in the prescribed 'form within sixty days from the date of this notice.
" Abdul Aleem mentioned in this notice is one of the children of Abdul Rai who had evacuated to Pakistan.
The order that was passed by the Competent Officer under section 11 of the Act of 1951, on March 23, 1954, recited that notices inviting claims were issued but no claims had been submitted, and then concluded, "So it is proved that no claim is filed deliberately though the individual notice has been served by post under a postal certificate.
The whole Composite property listed by Custodian shall vest free of encumbrances and liabilities in the Custodian Bhopal U/s 11 of the .
" It is the validity of this order that is questioned by the petitioners.
They admit that they filed no claims but they deny that any notice was served on them 537 and also otherwise challenge its validity.
We do not think it necessary to go into the question of the validity of the notice for it seems to us that even if there was valid notice, the order challenged cannot be upheld.
The question is, was the order justified by section II of the Act of 1951? That section so far as relevant reads thus: section 11(1).
Where in respect of any property, notice under section 6 is issued but no claim is filed or found to exist or where any claim in respect of such property is found to exist and the competent officer separates the evacuee interest therein under section 10, the whole property, or, as the case may be, the evacuee interest in the property thus sepa rated shall vest in the Custodian free from all encumbrances and liabilities and any payment, transfer or partition made or effected under section 10, in satisfaction of any claim in respect of the property shall be a full and valid discharge of all claims in respect of the property.
The respondents contend that the notice mentioned in the section having been issued and no claim pursuant thereto having been filed, the whole property had to vest in the Custodian and therefore the order of the Competent Officer was valid.
This contention seems to us to proceed on a misreading of the section.
Notices under section 6 are issued "for the purpose of determining or separating the evacuee interest in a composite property".
The object of the notice can therefore be one or other of two things, namely, for determining the evacuee interest or for separating the evacuee interest, in a composite property.
These are two entirely different things and are so treated in the Act as will appear from the definition of composite property and sections 8, 9 and 10.
The question of determining the evacuee interest arises when the interest is either a mortgagor 's or mortgagee 's interest in property or an undivided share in property the extent of which is not known.
The determination is then made as provided in cls.
(b), (c) and (d) of section 8(1), ascertaining the quantum of the interest as mortgagor, 68 538 mortgagee or co sharer, as the case may be.
A question as to separation of interest can arise, of course, only when that interest is known.
This is done under section 10 of the Act.
A case of separation may arise, for example, when the evacuee is found to have a definite undivided share in property.
Now, an evacuee may be found to have a definite undivided share as a result of enquiry under section 8 of the Act of 1951 or under the order made by the Custodian under a. 7 of the Act of 1950.
In the present case the Custodian had held under section 7 of the Act of 1950 that the evacuees were only entitled to 4/7th share in certain properties.
This will appear from the notice under section 6 of the Act of 1951 which we have earlier set out.
Section 8(2) says that the declaration by the Custodian under the Act of 1950 that any interest in property is evacuee property shall be binding on the Competent Officer, but this shall not prevent him from separating under section 10, the interest of the evacuee from that of the claimant.
In the present case the notice was expressly for the purpose of separation.
We have to read section 11 of the Act of 1951 in the light of the preceding sections.
We have also, in doing so, to remember that the object of the Act of 1951 is not to vest in the Custodian property which was not evacuee property but to vest in him only the evacuee interest in property after determining or separating, as the case may be, that interest from the interests of other persons in the manner laid down.
It has further to be remembered that it has been held by this Court that no property vests in the Custodian unless proceedings under section 7 of the Act of 1950 had been taken: Ebrahim Aboobaker vs Tek Chand Dolwani (1).
Section 11 therefore cannot vest in the Custodian any property which was not evacuee property; it cannot have the effect of making the entire property vest in the Custodian as evacuee property where the order under section 7 of the Act of 1956 held that a certain share in it only was evacuee property.
It would follow that when section 11 makes the whole property vest in the Custodian in the absence of a claim (1) ; 539 having been filed or such claim having been filed but found to be unsustainable, it deals with a case where the claim is as mortgagor or mortgagee or to an undivided share in a property where the order under section 7 of the Act of 1950 has declared the whole property to be evacuee property.
If it were not to be so read, then it would enable property admittedly not belonging to an evacuee, to vest in the Custodian.
Such could not have been the intention of the Act and would be against the decision of this Court earlier referred to.
The section therefore does not warrant the order of March 23, 1954, which purported to vest the entire properties in the Custodian though the Order under B. 7 of the Act of 1950 found only a four seventh share therein to be evacuee property.
We think it right to point out that it has not been contended on behalf of the respondent that the petition was .not maintainable.
We have therefore not gone into that aspect of the case and are not to be understood as having decided any question as to the maintainability of the petition.
In the result we get aside the order of March 23, 1954.
There will be no order as to costs.
This order will not however prevent proper steps being taken for the separation of the evacuees ' interest in the properties from the rest in accordance with the Act of 1951 or other provisions of law.
Petition allowed. | A Muslim died leaving some property and several heirs.
Some of the heirs became evacuees and their 4/7th share in the property was declared under section 7 of the , to be evacuee property.
There after, proceedings were taken for the separation of the interest of the evacuees, but as none of the claimants appeared, the Competent Officer passed an order under section II of the , vesting the entire property in the Custodian.
Held, that the order vesting the entire property in the Cus todian was illegal.
The share of the evacuees had been determined as 4/ 7ths and the Competent Officer was only required to separate it.
Section II could not vest in the Custodian any property which was not evacuee property.
This section deals only with cases where the whole property has been declared to be evacuee property and the claim is as mortgagor or mortgagee or to an undivided share in the property.
In such cases in the absence of a claim having been filed or having been filed and found unsustainable, section
II vests the whole property in the Custodian.
Ebrahim Aboobaker vs Tek Chand Dolwani, ; , referred to. |
: Writ Petition No. 153 of 1966.
(Under Article 32 of the Constitution of India for enforcement of the Fundamental Rights) And Writ Petition No. 202 of 1966.
(Under Article 32 of the Constitution of India for enforce ment of the Fundamental Rights) And Writ Petition No. 205 of 1966.
(Under Article 32 of the Constitution of India for enforcement of the Fundamental Rights) 778 In Writ Petition No. 153 of 1966.
R. V. section Mani, section K, Mehta and K. L. Mehta, for the petitioners.
Niren,De, Additional Solicitor General of India,and R. N. Sachthey, for the Respondents.
Niren De, Additional Solicitor General of India,G.Rajagopal, and R. H. Dhebar,for Intervener Ng.
1. section D. Banerjee, Advocate General for the State of West Bengal, B. Sen and P. K. Bose,for Intervener No.2.
Lal Narain Sinha, Advocate General for the State of Bihar, Bajrang Saha, M. M. Gajadhar, K. M. K. Nair, D. P. Singh, M. K. Ramamurthi, R. K. Garg, section C. Agarwala and G. D. Gupta, for Intervener No. 3.
Mohan Kumaramangalam., Advocate General for the State of Madras, B. Ramamurthi and A. V. Rangam, for Intervener No. V. D. Mahajan and R. H. Dhebar, for Intervener No., 5.
K. L. Mishra, Advocate General for the State of Uttar Pradesh, and O. P. Rana, for Intervener No., 6.
V. A. Seyid Muhamad, Advocate General for the State of Kerala, B. R. L. Iyengar, A. G. Pudissery, for Intervener No. 7.
Naunit Lal, for Intervener No. 8.
K. B. Mehta, for Intervener No. 9.
P. Ram Reddy and T. V. R. Tatachari, for Intervener No. 10.
M. C. Stealvad, B. R. L. Iyengar and R. H. Dhebar, for Inter vener No. 11.
R. Thiagarajan, for Intervener No. 12.
D. N. Mukherjee, for Interveners Nos. 13 and 19 to 21.
E. Udayairatnam, section section Dalal and D. D. Sharma, for Inter veners Nos. 14 and 15.
R. K Garg, D. P. Singh, M. K. Ramamurthi, section C. Agarwala, G. D. Gupta and K. M. K. Nair ' for Intervener No. 16. 'K. Parasaran and K. R. Chaudhuri, for Intervener No. 17.
Basudev Prasad, K. Parasaran and K. R. Chaudhuri, for Intervener No. 18.
Basudev Prasad, K. Rajendra Chaudhuri, K. R. Chaudhuri and section N. Prasad, for Interveners Nos.
22 to 24.
779 in Writ Petition No. 202 of 1966.
M.K. Nambyar, K. B. Jinaraja Hegde, N. A., Subramaniam, Bhuvanesh Kumari, O. C. Mathur, J. B. Dadachanji and Ravin der Narain, for the Petitioner.
H. R. Gokhale, B. P. G. K. Achar, K. H. Dhebar, R. N. Sachthey and section P. Nayyar, for Respondent No. 1.
Niren De, Additional Solicitor General, N. section Bindra and R. N. Sachthey, for Respondent No. 2.
A. K. Sen, F. section Nariman, M. L. Bhakte, section I. Thakere, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for Intervener No. 1.
N. A. Palkhiwala, F. section Nariman, M. L. Bhakte, D. M. Popat,0.
P. Malhotra, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for Intervener No. 2. D. M., Parulekar B. Dutta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for Intervener No. 3.
In Writ Petition No. 205 of 1966.
M. K. Nambyar, K. B. Jinaraja Hegde, N. A. Subramaniam, Bhuvanesh Kumari, O. C. Mathur, J. B. Dadachanji and Ravin der Narain, for the Petitioner.
H. R. Gokhale, B. R. G. K. Achar, R. H. Dhebar and section P. Nayyar, for Respondent No. 1. section G. Patwardhan, D. M. Parulekar, B. Dutta, section K. Dhelika, 1.
B. Dadachanji, O. C. Mathur and Ravinder Narain, for the Intervener.
The Judgment Of SUBBA RAO, C.J., SHAH, SIKRI, SHELAT and VAIDIALINGAM, JJ. was delivered by SUBBA RAO, C.I. According to this Judgment (i) the power to amend the Constitution is not to be found in article 368 but in articles 245, 246 and 248 read with Entry 97 of List 1; (ii) the amending power can.
not be used to abridge or take away the fundamental rights guaranteed in Part III of the Constitution; (iii) a law amending the Constitution is "Law" within the meaning of article 13(2) and (iv).
the First, Fourth and Seventeenth Amendments though they abridged fundamental rights were valid in the past on the basis of earlier decisions of this Court and continue to be valid for the future.
On the application of the doctrine of "prospective over ruling", as enunciated in the judgment, the decision will have only prospective operation and Parliament will have no power to abridge or take away Fundamental Rights from the date of the judgment.
The Judgment of WANCHOO, BHARGAVA and MITTER, JJ. was delivered by WANCHOO, J.
According to this Judgment (i) the 780 power of amending the Constitution resides in article 368 and not in articles 245, 246 and 248, read with EntrY 97 of List 1; (ii) there, are no restrictions on the power if the procedure in article 368 is followed and all the Parts of the Constitution including Part III, can be amended, (iii) an amendment of the Constitution is not " 'law" under article 13(2); and (iv) the doctrine of "prospective overruling" cannot be applied in India.
HIDAYATULLAH, J. delivered a separate judgment agreeing with SUBBA RAo, CJ.
on the following two points: (i) that the power to amend the Constitution cannot be used to abridge or take away fundamental rights; and (ii) that a law amending the Constitution is "law" under article 13 (2).
He agrees With WANCHOO, J. that the power to amend does not reside in articles 245 and 248 read wish Entry 97 of List 1. article 368, according to him, is sui generis and procedural and the procedure when correctly followed, results in an amendment.
He does not rely on the doctrine of "prospective overruling".
As regards the First, Fourth and Seventh Amendments, these having long enured and been acquiesced in, he does not treat the question of their validity as being before him.
As regards the Seventeenth Amendment he finds sufficient support for it in the Constitution as amended by the First, Fourth and Seventh Amendments and holds that the new definition of "estate", introduced by the Amendment, though it is "law" under article 13 (2) and is an inroad into fundamental rights, is beyond the reach of the courts because it falls within the word "law" in articles 31 (1), (2), 2A and 31A(1).
He, however, declares section 3 of the Seventeenth Amendment Act ultra vires the amending process as an illegitimate exercise of the amending power.
[BACHAWAT and RAMASWAMI, JJ. delivered separate judgments concurring with WANCHOO, J.] Subbarao, C.J.
These three writ petitions raise the important question of the validity of the Constitution (Seventeenth Amendment) Act, 1964.
Writ Petition No. 153 of 1966, is filed by the petitioners therein against the State of Punjab and the Financial Commissioner, Punjab.
The petitioners are the son, daughter and granddaughters of one Henry Golak Nath, who died on July 30, 1953.
The Financial Commissioner, in revision against the order made by the Additional Commissioner, Jullundur Division, held by an order dated January 22, 1962 that an area of 418 standard acres and 9 1/4 units was surplus in the hands of the petitioners under the provisions of the Punjab Security of Land Tenures Act X of 1953, read with section 10 B thereof.
The petitioners, alleging that the relevant provisions of the said Act where under the said area was 781 declared surplus were void on the ground that they infringed their rights under cls.
(f) and (g) of article 19 and article 14 of the Constitution, filed a writ in this Court under article 32 of the Constitution for a direction that the Constitution (First Amendment) Act 1951, Constitution (Fourth Amendment) Act, 1955, Constitution (Seventeenth Amendment) Act, 1964, insofar as they affected their fundamental rights were unconstitutional and inoperative and for a direction that section 10 B of the said Act X of 1953 was void as violative of articles 14 and 19 (1) (f) and (g) of the Constitution.
Writ Petitions Nos. 202 and 203 of 1966 were filed by different petitioners under article 32 of the Constitution for a declaration that the Mysore Land Reforms Act (Act 10 of 1962) as amended by Act 14 of 1965, which fixed ceilings on land holdings and conferred ownership of surplus lands on tenants infringed articles 14, 19 and 31 of the Constitution and, therefore, was unconstitutional and void.
The States of Punjab and Mysore, inter alia, contended that the said Acts were saved from attack on the ground that they infringed the fundamental rights of the petitioners by reason of the Constitution (Seventeenth Amendment) Act, 1964, which, by amending article 31 A of the Constitution and including the said two Arts in the 9th Schedule thereto, had placed them beyond attack.
In Writ Petition No. 153 of 1966, 7 parties intervened.
In Writ Petition No. 202 of 1966 one party intervened.
In addition, in the first petition, notice was given to the Advocates General of various States.
A11 the learned counsel appearing for the parties, the Advocates General appearing for the States and the learned counsel for the interveners have, placed their respective viewpoints exhaustively before us.
We are indebted to all of them for their thorough preparation and clear exposition of the difficult questions of law that were raised in the said petitions.
At the outset it would be convenient to place briefly the respective contentions under different heads : (1) The Constitution is intended to be permanent and, therefore, it cannot be amended in a way which would injure, maim or destroy its indestructible character.
(2) The word "amendment" implies such an addition or change within the lines of the original instrument as will effect an improvement or better carry out the purpose for which it was framed and it cannot be so construed as to enable the Parliament to destroy the permanent character of the Constitution.
(3) The fundamental rights are a part of the basic structure of the Constitution and, therefore, the said power can be exercised only to preserve rather than destroy the essence of those rights.
(4) The limits on the power to amend are implied in article 368, for the 782 expression "amend" has a limited meaning.
The wide phraseo logy used in the Constitution in other Articles, such as "repeal" and "re enact" indicates that article 368 only enables a modification of the Articles within the framework of the Constitution and a destruction of them.
(5) The debates in the Constituent Assembly, particularly the speech of Mr. Jawahar Lal Nehru, the first PA= Minister of India, and the reply of Dr. Ambedkar, who piloted the Bill disclose clearly that it was never the intention of the makers of the Constitution by putting in article 368 to enable the Parliament to repeal the fundamental rights, the circumstances under which the amendment moved by Mr. H. V. Kamath, one of the members of Constituent Assembly, was withdrawn and article 368 was finally adopted, support the contention that amendment of Part II, is outside the scope of article 368.
(6) Part III of the Constitution is a self contained Code.
and its provisions are elastic enough to meet all reasonable requirements of changing situations.
(7) The power to amend is sought to be derived from three sources, namely, (i) by implication under article 368 itself; The procedure to amend culminating in the amendment of the Constitution necessarily implies that power, (ii) the power and ,the limits of the power to amend are implied in the Articles sought to be amended, and (iii) article 368 only lays down the procedure to amend, but the power to amend is only the legislative power conferred on the Parliament under articles 245, 246 and 248 of the Constitution.
(8) The definition of "law" in article 13(2) of the Constitution includes every branch of law, statutory, constitutional, etc., ' and therefore, the power to amend in whichever branch it may be classified, if it takes away or abridges fundamental rights would be void thereunder.
(9) The impugned amendment detracts from the jurisdiction of the High Court under article 226 of the Constitution and also the legislative powers of the States and therefore it falls within the scope of the proviso to article 368.
The said summary, though not exhaustive, broadly gives the various nuances of the contentions raised by the learned counsel, who question the validity of the 17th Amendment.
We have not noticed the other arguments of Mr. Nambiar, which are peculiar to the Writ Petition No. 153 of 1966 as those questions do not arise for decision, in the view we are taking on the common questions.
On behalf of the Union and the States the following points were pressed : (1) A Constitutional amendment is made in exercise of the sovereign power and not legislative power of Parliament and,.
therefore, it partakes the quality and character of the Constitution itself.
(2) The real distinction is between a rigid and a flexible Constitution.
The distinction is based upon the express limits of the amending power.
(3) The provisions of article 783 368 axe clear and unequivocal and there is no scope for invoking implied limitations on that power: further the doctrine of impliedpower has been rejected by the American courts and jurists.
(4) The object of the amending clause in a flexible Consetitution is to enable the Parliament to amend the Constitution in order to express the will of the people according to the changing course of events and if amending power is restricted by implied limitations, the Constitution itself might be destroyed by revolution.
Indeed, it is a safety valve and an alternative for a violent change by revolution.
(5) There are no basic and non basic features of the Constitution; everything in the Constitution is basic and it can be amended in order to help the future growth and progress of the country.
(6) Debates.
in the Constituent Assembly cannot be relied upon for construing article 368 of the Constitution and even if they can be, there is nothing in the debates to prove, positively that fundamental rights were excluded from amendment.
(7) Most of the amendments are made out of political necessity: they involve, questions, such.
as, how to exercise power,, how to make the lot of the citizens better and the like and, therefore, not being judicial questions, they are outside the court 's jurisdiction.
(8) The language of article 368 is clear, categorical, imperative and universal, on the other hand, the language of article 13(2) is such as to admit qualifications or limitations and, therefore, the Court must construe them in such a manner as that Article could not control article 368.
(9) In order to enforce the Directive Principles the Constitution was amended from time to time and the great fabric of the Indian Union has been built since 1950 on the basis that the Constitution could be amended and, therefore, any reversal of, the previous I decisions would introduce economic chaos in our country and that, therefore, the burden is very heavy uponthe petitioners to establish that the fundamental rights cannot be amended under article 368 of the Constitution.
(10) article 31 A and the 9th Schedule do not affect the power of the High Court under article 226 or the legislative power of the States though the area of their operation is limited and, therefore, they do not fall within the scope of the proviso to article 3 68.
The aforesaid contentions only represent a brief summary of elaborate arguments, advanced by learned counsel.
We shall deal in appropriate context with the other points mooted before US.
It will be convenient to read the material provisions of theConstitution at.
this stage.
Article 13(1) (2) The State shall not make any law which takes away or abridges the rights conferred by this part and any law made in contravention of this clause shall, toy the extent of the contravention, be void.
784 (3) In this article, unless the context otherwise requires, (a) "law" includes any Ordinance, order, bye law, rule regulation, notification, custom or usage having in the territory of India the force of law.
Article 31 A(1), Notwithstanding anything contained in article 13, no law providing for, (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31.
(2) (a) the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenure in force in that area and shall also include, (ii) any land held under ryotwari settlement, (iii) any land held or let for purposes of agriculture or for purposes ancillary thereto.
Article 31 D. Without prejudice to the generality of the provisions contained in article 31 A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and not withstanding any judgment decree or order of any court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force.
In the Ninth Schedule to the Constitution the Mysore Land Reforms Act, 1961, (Mysore Act 10 of 1962) is included as item 51 and the Punjab Security of Land Tenures Act, 1953 (Punjab Act 10 of 1953) is included as item 54.
The definition of "estate" was amended and the Ninth Schedule was amended by including therein the said two Acts by the Constitution (Seventeenth Amendment) Act, 1964.
785 The result of the said amendments is that both the said Acts dealing with estates, within their wide definition introduced by the Constitution (Seventeenth Amendment) Act, 1964, having been included in the Ninth Schedule, are placed beyond any attack on the ground that their provisions are inconsistent with or take away or abridge any of the rights conferred by Part III of the Constitution.
It is common case that if the Constitution (Seventeenth Amendment) Act, 1964, was constitutionally valid, the said Acts could not be impugned on any of the said grounds.
The question of the amendability of the fundamental rights was considered by this Court earlier in two decisions, namely, Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar(1) and in Sajjan Singh vs State of Rajasthan (2) In the former the validity of the Constitution (First Amend ment) Act, 1951, which inserted, inter alia, articles 31 A and 31 B in the Constitution, was questioned.
That amendment was made under article 368 of the Constitution by the Provisional Parliament.
This Court held that Parliament had power to amend Part III of the Constitution.
The Court came to that conclusion on two grounds, namely, (1) the word "law" in article 13(2) was one made in exercise of legislative power and not constitutional law made in exercise of constituent power; and (ii) there were two articles (articles 13(2) and 368) each of which was widely phrased and, therefore, harmonious construction required that one should be so read as to be controlled and qualified by the other, and having regard to the circumstances mentioned in the judgment article 13 must be read subject to article 368.
A careful perusal of ' the judgment indicates that the whole decision turned upon an assumption that the expression "law" in Art 13(2) does not include constitutional law and on that assumption an attempt was made to harmonise Article 13 (2) and 368 of the Constitution.
The decision in Sajjan Singh 's case(2) was given in the con text of the question of the validity of the Constitution (Seventeenth Amendment) Act, 1964.
Two questions arose in that case: (1) Whether the amendment Act insofar it purported to take away or abridge the rights conferred by Part III of the Constitution fell within the prohibition of article 13(2) and (2) Whether Articles 31 A and 31 B sought to make changes in articles 132, 136 or 226 or in any of the lists in the Seventh Schedule and therefore the requirements of the proviso to Article 368 had to be satisfied.
Both the Chief Justice and Mudholkar, J. made it clear that the first contention was not raised before the Court.
The learned counsel appearing for both the parties accepted the correctness of the decision in Sankari Prasad 's case(1) in that (1) ; ,105.
(2) ; , 946, 950, 959, 961, 963.
786 regard.
Yet Gajendragadkar, C.J. speaking for the majority ,agreed with the reasons given in Sankari Prasad 's case(1) on the first question and Hidayatullah and Mudholkar, JJ.
expressed their dissent from the said view.
But all of them agreed, though for different reasons on the second question.
Gajendragadkar, C.J. speaking for himself, Wanchoo and Raghubar Dayal, JJ. rejected the contention that article 368 did not confer power on Parliament to take.
away the fundamental rights guaranteed by Part III.
When a suggestion was made that the decision in the aforesaid case should be reconsidered and reviewed, the learned Chief Justice though he conceded that in a case where a decision had a significant impact on the fundamental rights of citizens, the Court would be inclined to review its earlier decision in the interests of the public good, he did not find considerations of substantial and compelling character to do so in that case.
But after: referring to the reasoning given in Sankari Prasad 's case(1) the; learned Chief Justice observed "In our opinion , the expression "amendment of the, Constitution" plainly and unambiguously means amendment of all the provisions of the Constitution.
" Referring, to article 13 (2), he restated the same reasoning found in, the earlier decision and added that if it was the intention of the Constitution makers to save, fundamental rights from the amending,process they should have taken the precaution of making A .
clear provision in that regard.
In short, the majority, speaking through Gajendragadkar, C.L agreed that no case had been made, out for reviewing the earlier decision and practically accepted the reasons given in the earlier decision.
Hidyatullah J. speaking for himself, observed "But I make it clear that I must not be understood to have subscribed to the view that the word "law" in article 13(2) does not control constitutional amendments.
, I reserve my opinion on that case for I apprehend that it depends on how wide is the "law"in that Article." After giving his reasons for doubting the correctness of the reasoning given in Sankari Prasad 's case(1), the learned Judge concluded thus : "I would require stronger reasons than those given in Sankari Prasad 's case(1) to make me accept the view that Fundamental Rights were not really fundamental but were intended to be within the powers of amendment in common with the other parts of the Constitution and without the concurrence of the States." (1) ; 787 The.
learned Judge continued "The Constitution gives so many assurances in Part III that it would be difficult to think that they were the playthings of a special majority.
" Mudholkar, J. was positive that the result of a legislative action of a legislature could not be other than "law" and, therefore, it seemed to him that the fact that the legislation dealt with the amendment of a provision of the Constitution would not make, its results anytheless a 'law".
He further pointed out that article 368 did not say that whenever Parliament made an amendment to the Constitution it assumed a different capacity from that of a constituent body.
He also brought out other defects in the line of reasoning adopted in Sankari Prasad 's case(1).
It will, therefore,be seen that the correctness of the decision in Sankari Prasad 's case(1) was not questioned in Sajjan Singh 's case(2) Though it was not questioned, three of the learned Judges agreed with the view expressed therein, but two learned Judges were inclined to take a different view.
But, as that question was not raised, the minority agreed with the conclusion, arrived at by the majority on the question whether the Seventeenth Amendment Act was, covered by the proviso.
to article 368 of the Constitution.
The conflict between the majority and the minority in Sajjan 's Singh 's case(1) falls to be resolved in this case.
The said conflict and, the great importance of the question raised is the justification for . the Constitution of the larger Bench.
, The decision in Sankri Prasad 's case(1) was assumed to be correct in subsequent decisions of this Court.
See section Krishnan vs State of Madras(1), The State ' of West Bengal vs Anwar All Sarkar(1) and Basheshar Nath vs The Commissioner of Income tax, Delhi and Rajasthan(5).
But nothing turns upon that fact, as the correctness of the derision was not questioned .
in those cases.
A correct appreciation of the scope and the place of funda mental rights in our Constitution will give its the right perspective for solving the problem presented before us, Its scope cannot be appreciated unless we have a conspectus of the Constitution, its objects.
and its machinery to achieve those object.
The objective sought to be achieved by the Constitution is declared in sonorous terms.
in its preamble which reads "We the people of India having solemnly resolved to constitute India into a Sovereign, Democratic, Republic and to secure to all its citizens justice.
liberty.
equality.
and fraternity .
(1) ; (3) ; at page 652.
(2) [1965] 1 S.C.R.933.
(4) ; , 366.
(5) [1959] Supp. 1 S.C.R. 528,563.
788 It contains in a nutshell, its ideals and its aspirations.
The preamble is not a platitude but the, mode of its realisation is worked out in detail in the Constitution.
The Constitution brings into existence different constitutional entities, namely, the Union, the States and the Union Territories.
It creates three major instruments of power, namely, the Legislature, the Executive and the Judiciary.
It demarcates their jurisdiction minutely and expects them to exercise their respective powers without overstepping their limits.
They should function within the spheres allotted to them.
Some powers overlap and some are superseded during emergencies.
The mode of resolution of conflicts and conditions for supersession are also prescribed.
In short, the scope of the power and the manner of its exercise are regulated by law.
No authority created under the Constitution is supreme; the Constitution is supreme; and all the authorities function under the supreme law of the land.
The rule of law under the Constitution has a glorious content.
It embodies the.
modem concept of law evolved over the centuries.
It empowers the Legislatures to make laws in respect of matters enumerated in the 3 Lists annexed to Schedule VII.
In Part IV of the Constitution, the Directive Principles of State Policy are laid down.
It enjoins it to bring about a social order in which justice, social.
economic and political shall inform all the institutions of national life.
It directs it to work for an egalitarian society where there is no concentration of wealth, where there is plenty, where there is equal opportunity for all, to education, to work, to livelihood '.
and where there is social justice.
But, having regard to the past history of our country, it could not implicitly believe the representatives of the people, for uncontrolled and unrestricted power might lead to an authoritarian State.
It, therefore, preserves the natural rights against the State encroachment and constitutes the higher judiciary of the State as the sentinel of the said rights and the balancing wheel between the rights, subject to social control.
In short, the fundamental rights, subject to social control, have been incorporated in the rule of law.
That is brought about by an interesting process.
In the implementation of the Directive Principles, Parliament or the Legislature of a State makes laws in respect of matter or matters allotted to it.
But the higher Judiciary tests their validity on certain objective criteria, namely, (i) whether the appropriate Legislature has the legislative competency to make the law; (ii) whether the said law infringes any of the fundamental rights; (iii) even if it Infringement the freedoms under article 19, whether the infringement only amounts to "reasonable restriction" on such rights in "public interest.
" By this process of scrutiny, the court maintains the validity of only such laws as keep a just balance between freedoms and social control.
The duty of reconciling fundamental rights in article 19 and the laws of social control is cast upon the courts 789 and the touchstone or the standard is contained in the said two expressions.
The standard is an elastic one; it varies with time, space and condition.
What is reasonable under certain circumstances may not be so under different circumstances.
The constitutional philosophy of law is reflected in Parts 1111 and IV of the Constitution.
The rule of law under the Constitution serves the needs of the people without unduly infringing their rights.
It recognizes the social reality and tries to adjust itself to it from time, to time avoiding the authoritarian pat@. EKery institution or political party that functions under the Constitution must accept it; otherwise it has no place under the Constitution.
Now, what are the fundamental rights ? They are embodied in Part III of the Constitution and they may be classified thus : (i) right to equality, (ii) right to freedom, (iii)right against exploitation, (iv) right to freedom of religion, (v) cultural and educational rights, (vi) right to property, and (vii) right to constitutional remedies.
They are the rights of the people preserved by our Constitution.
"Fundamental rights" are the modern name for what have been traditionally known as "natural rights".
As one author puts: "they are moral rights which every human being everywhere at all times ought to have sim y because of the fact that in contradistinction with ot moral.
" They are the primordial ment of human personality.
man to chalk out his own life in is rational and ry for the developrights which enable a he likes best.
Our Constitution, in addition to the well known fundamental rights, also included the rights of the minorities, untouchables and other backward communities, in such rights.
After having declared the fundamental rights, our Constitution says that all laws in force in the territory of India immediately before the commencement of the Constitution, insofar as they are inconsistent with the said rights, are, to the extent of such inconsistency, void.
The Constitution also enjoins the State not to make any law which takes away or abridges the said rights and declares such laws, to the extent of such inconsistency, to be void.
As we have stated earlier, the only limitation c)n the freedom enshrined in article 19 of the Constitution is that imposed by a valid law rating as a reasonable restriction in the interests of the public.
It will, therefore, be seen that fundamental rights are given transcendental position under our Constitution and are kept beyond the reach of Parliament.
At the same time Parts 1111 and V constituted an integrated scheme forming a self contained code.
The scheme is made so elastic that all the Directive ' Principles of State Policy can reasonably be enforced 'without taking up.
Cl/67 5 790 away or abridging the fundamental rights.
While recognizing the immutability of fundamental rights, subject to social control, the Constitutional itself provides for the suspension or the modification of fundamental rights under specific circumstances, for instance, article 33 empowers Parliament to modify the rights conferred by Part III in their application to the members of the armed forces, article 34 enables it to impose restrictions on the rights conferred by the said parts while martial law is in force in an area, article 35 confers the power on it to make laws with respect to any of the matters which under clause (3) of article 16, Clause (3) of article 32, article 33 and article 34 may be provided for by law.
The non obstante clause with which the last article opens makes it clear that all the other provisions of the Constitution are subject to this provision.
Article 32 makes the right to move the Supreme Court, by appropriate proceedings for the enforcement of the rights conferred by the said Parts a guaranteed right.
Even during grave emergencies article 358 only suspends the provisions of article 19; and article 359 enables the President by order to declare the right to move any court for the enforcement of such of the rights conferred by Part III as may be mentioned in that order to be suspended; that is to say, even during emergency, only article 19 is suspended temporarily and all other rights are untouched except those specifically suspended by the President.
In the Book "Indian Constitution Corerstone of a Nation" by Granville Austin, the scope origin and the object of funda mental rights have been graphically stated.
Therein the learned author says : ". . the core of the commitment to the social revolution lies in Parts III and IV, in the Fundamental Rights and fit the Directive Principles of State Policy.
These are the conscience of the Constitution.
" Adverting to the necessity for incorporating fundamental rights in a Constitution, the learned author says That a declaration of rights had assumed such importance was not surprising; India was a land of communities, of minorities, racial, religious, linguistic, social and caste.
For India to become a state these minorities had to agree to be governed both at the centre and in the provinces by fellow Indian members, perhaps, of another minority and not by a mediatory third power, the British.
On both psychological and political, rounds.
, therefore , the demand for written right rights would provide tangible safeguards, against oppression proved overwhelming.
791 Motilal Nehru, who presided over the Committee called for by the Madras Congress resolution, in May, 1928 observed in his report : "It is obvious that our first care should be to have our Fundamental Rights guaranteed in a manner which will not permit their withdrawal under any circumstances .
Another reason why great importance attached to a Declaration of Rights is the unfortunate existence of communal differences in the country.
Certain safeguards are necessary to create and establish a sense of security among those who look upon each other with distrust and suspicion.
We could dot, better secure the full enjoyment of religious and communal rights to all communities than by including them among the basic principles of the Constitution." Pandit Jawaharlal Nehru, on April 30, 1947 in proposing for the adoption of the Interim Report on Fundamental Rights, said thus : "A fundamental right should be looked upon, not from the point of view of any particular difficulty of the moment, but as something that you want to make permanent in the Constitution.
The other matter should be looked upon however important it might be not from this permanent and fundamental point of view, but from the more temporary point of view." Pandit Jawaharlal Nehru, who was Prime Minister at that time and.
who must have had an effective voice in the framing of the Constitution, made this distinction between fundamental rights and other provisions of the Constitution, namely, the former were permanent and the latter were amendable.
On September 18, 1949 Dr. Ambedkar in speaking on the amendment proposed by Mr. Kamath to article 304 of the Draft Constitution corresponding to the present article 368, namely, "Any provision of this Constitution may be amended, whether by way of variation, addition or repeal, in the manner provided in this article", said thus "Now, what is it we do ? We divide the articles of the Constitution under three categories.
The first category is the one which consists of articles which can be amended by Parliament by a bare majority.
The second set of articles are articles which require two thirds majority.
If the future Parliament wishes to amend any particular article which is not mentioned in Part III or article 304, all that is necessary for them is to have two thirds majority.
Then they can amend it.
" 792 Therefore, in Dr. Ambedkar 's view the fundamental rights were so important that they could not be amended in the manner provided by article 304 of the Draft Constitution, which corresponds to the present article 368.
We have referred to the speeches of Pandit Jawaharlal Nehru and Dr. Ambedkar not with a view to interpret the provisions of article 368, which we propose to do on its own terms, but only to notice the transcendental character given to the fundamental rights by two of the important architects of the Constitution.
This Court also noticed the paramountcy of the fundamental rights in many decisions.
In A. K. Gopalan vs State of Mad ras(1) they are described as "paramount ', in State of Madras vs Smt.
Champakam Dorairajan(2) as "sacrosanct", in Pandit M. section M. Sharma vs Shri Sri Krishna Sinha(s) as "rights reserved by the people ', in Smt.
Vijam Bai vs State of Uttar Pradesh(1) as "inalienable and inviolable",and in other cases as "transcendental".
The minorities regarded them as the bedrock of their political existence and the majority considered them as a guarantee for their way of life.
This, however, does not mean that the problem is one of mere dialectics.
The Constitution has given by its scheme a place of permanence to the fundamental freedoms.
In giving to themselves the Constitution, the people have reserved the fundamental freedoms to themselves.
Article 13 merely incorporates that reservation.
That Article is however not the source of the protection of fundamental rights but the expression of the reservation.
The importance attached to the fundamental freedoms is so transcendental that a bill enacted by a unanimous vote of all the members of both the Houses is ineffective to dero gate from its guaranteed exercise.
It is not what the Parliament regards at a given moment as conducive to the public benefit, but what Part III declares protected, which determines the ambit of the freedom.
The incapacity of the Parliament therefore in exercise of its amending power to modify, restrict or impair fundamental freedoms in Part III arises from the scheme of the Constitution and the nature of the freedoms.
Briefly stated, the, Constitution declares certain rights as fundamental laws infringing the said rights of social control infringing the said power on Parliament and the them in specified circumstances; if the decisions in San Prasad 's case(1) and Sajjan Singh 's case(1) laid down the correct law, it enables the same Parliament to abrogate them with one stroke, provided the party in power singly or in combination with other parties commands the neces (1) ; 198.
(3) [1959] Supp. 1 S.C.R. 806.
(5) [1952] S.C.P. 89,105.
(2) ; (4) [1963] 1 S.C.R. 778.
(6) ; 793 sary majority.
While articles of less significance would require consent of the majority of the States, fundamental rights can.
be dropped without such consent.
While a single fundamental right cannot be abridged or taken away by the entire Parliament unanimously voting to that effect, a two thirds ' majority can do away with all the fundamental rights.
The entire super structure built with precision and high ideals may crumble at one false step.
Such a conclusion would attribute unreasonableness to the makers of the Constitution, for, in that event they would be speaking in two voices.
Such an intention cannot be attributed to the makers of the Constitution unless the provisions of the Constitution compel us to do so.
With this background let us proceed to consider the provisions of article 368, vis a vis article 13(2) of the Constitution.
The first question is whether amendment of the Constitution under article 368 is "law" within the meaning of article 13(2).
The marginal note to article 368 describes that article as one prescribing the procedure for amendment.
The article in terms only prescribes various procedural steps in the matter of amendment: it shall be initiated by the introduction of a bill in either House of Parliament; it shall be passed by the prescribed majority in both the Houses; it shall then be presented to the President for his assent; and upon such assent the Constitution shall stand amended.
The article assumes the power to amend found else and says that it shall be exercised in the manner laid down therein.
The argument that the completion of the procedural AM culminates in the exercise of the power to amend may be subtle but does not carry conviction.
If that was the intention of the provisions, nothing prevented the makers of the Constitution from stating that the Constitution may be amended in the manner suggested.
Indeed, whenever the Constitution sought to confer a special power to amend on any authority it expressly said so : (See articles 4 and 392).
The alternative contention that the said power shall be implied either from article 368 or from the nature of the articles sought to be amended cannot be accepted, for the simple reason that the doctrine of necessary implication cannot be invoked if there is an express sion or unless but for such implication the article will no necessity to imply any plenary power to make any Constitution subject to the Uninfluenced by any foreign doctrines let us look at the provisions of our Constitution.
Under article 245, "subject to the provisions of the Constitution, Parliament may make laws for the whole or any part of the territory of India. .
Article 246 demarcates the matters in respect of which Parliament and State 794 Legislatures may make laws.
In the field reserved for Parliament there is Entry 97 which empowers it to make laws in respect of " any other matter not enumerated in Lists II and III including any tax not mentioned in either of those lists.
" Article 248 expressly states that Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List ,or State List.
It is, therefore, clear that the residuary power of legislation is vested in Parliament.
Subject to the argument based upon the alleged nature of the amending power as understood by jurists in other countries, which we shal consider at a later stage, it cannot be contended, and indeed, it was not contended, that the Constituent Assembly, if it were so minded, could not have conferred an express legislative power on Parliament to amend the Constitution by ordinary legislative process.
Articles 4 and 169, and para 7 of the 5th Schedule and para 21 of the 6th Schedule have expressly conferred such power.
There is, therefore, no inherent Inconsistency between legislative process and the amending one.
Whether in the field of a constitutional law or statutory law amendment can be brought about only by law.
The residuary power of Parliament, unles there is anything contrary in the ,Constitution, certainly takes in the power to amend the Constitution.
It is said that two Articles 'indicate the contrary intention.
As article 245, the argument proceeds, is subject to the provisions of the Constitution, every law of amendment will necessarily be inconsistent with the articles sought to be amended. 'Ibis is an argument in a circle.
Can it be said reasonably that a law amending an article is inconsistent with the article amended ? If an article of the Constitution expressly says that it cannot be amended, a law cannot be made amending it, as the power of Parliament to make a law is subject to the said Article.
It may well be that in a given case such a limitation may also necessarily be implied.
The limitation in article 245 is in respect of the power to make a law and not of the content of the law made Within the scope of its power.
The second criticism is based upon article 39 of the Constitution.
That provision confers power on the President to remove difficulties; in the circumstances mentioned in that provision, he can by order direct that the Constitution shall during such period as may be specified in that order have effect subject to such adaptations, whether by way of modification, addition ,or omission, as he may deem to be necessary or expedient.
The argument is that the President 's power, though confined to a temporqry period,is co extensive with legislative power and if the power to amend is a legislative power it would have to be held that the President can amend the Constitution in terms of article 368.
Apart from the limited scope of article 392, which is intended only for the purpose of removing difficulties and for bringing about a smooth transition, an order made by the Presi 795 dent cannot attract article 368, as the amendment contemplated by that provision can be initiated only by the introduction of a bill in the Parliament.
There is no force in either of the two criticisms.
Further, there is, internal evidence in the Constitution itself which indicates that amendment to the Constitution is a "law" within the meaning of article 245.
Now, what is "law" under the Constitution ? It is not denied that in its comprehensive sense it includes constitutional law and the law amending the Constitution is constitutional law.
But article 13(2) for the purpose of that Article gives an inclusive definition.
It does not exclude Constitutional law.
It prima facie,takes in constitutional law.
Article 368 itself gives the necessary clue to the problem.
The amendment can be initiated by.
the introduction of a bill; it shall be passed by the two Houses; it shall ' receive the assent of the President.
These are well known procedural steps in the process of law making : Indeed this Court in Sankari Prasads case(1) brought out this idea in clear terms.
It said "in the first place, it is provided that the amendment must be initiated by the introduction of a "bill in either House of Parliament ' a familiar feature of Parliament procedure (of Article 107(1) which says "A bill may originate in either House of Parliament"). 'Then, the bill must be "Passed in each House," just what Parliament does when it is called upon to exercise its normal legisrative function Article 107(2)1; and finally, the bull thus passed must be "president to the President" for his "assent", again a parliamentary process through which every bill must pass before it can reach the statute book, (Article 1 1 1 ).
We thus find that each of the component units of Parliament is to play its allotted part in bringing about an amendment to the Constitution.
We have already seen that Parliament effects amendments of the first class mentioned above by going through the same three fold procedure but with a simple majority.
The fact that a different majority in the same body is required for effecting the second and third categories of 1 amendments make the amending agency a different body.
" In the same decision it is pointed out that article 368 is not a complete code in respect of the procedure.
This Court said "There are gaps in the procedure as to how and after what notice a bill is to be introduced, how it is to be passed by each House and how the President 's assent is to be obtained.
Having provided for the Constitution of a Parliament and prescribed a certain procedure for the conduct of its ordinary legislative business to be supplemented by rules made by each House (Article 118), the makers of the Constitution must be taken to have intended Parliament to follow that procedure, so far as they may be applicable consistently with the express provision of article 368, when they have entrusted to it the power of =ending the Con (1) ( 1 952) S.C. R. 89.
796 stitution.
" The House of the People made rules providing procedure for amendments, the same as for other Bills with the addition of certain special provisions viz., Rules 155, 156, 157 and 158.
If amendment is intended to be something other than law, the constitutional insistence on the said legislative process is unnecessary.
In short, amendment cannot be made otherwise than by following the legislative process.
The fact that there are other conditions, such as, a larger majority and in the case of articles mentioned in the proviso a ratification by Legislatures is provided, does not make the amendment anytheless a law.
The imposition of further conditions is only a safeguard against hasty action or a protection to the States, but does not change the Legislative character of the amendment.
This conclusion is reinforced by the other articles of the Constitution.
Article 3 enables Parliament by law to form now States and alter areas, boundaries or the names of existing States.
imposed two, further conditions, of the President, and (ii) in therein, the views expressed by the Legislatures.
Notwithstanding the said conditions it cannot be suggested that the expression "law" under the said Article is not one made by the Legislative process.
Under article 4, such a law can contain provisions for amendment of Schedules I and IV indicating thereby that amendments are only made by Legislative process.
What is more, cl.
(2) thereof introduces a fiction to the affect that such a law shall not be deemed to be an amendment to the Constitution.
This shows that the amendment is law and that but for the fiction it would be an amendment within the meaning of article 368.
Article 169 which empowers Parliament by law to abolish or create Legislative Councils in States, para 7 of the 5th Schedule and para 21 of the 6th Schedule which enable Parliament by law to amend the said Schedules, also bring out the two ideas that the amendment is law made by legislative process and that but for the fiction introduced it would attract Article 368.
That apart amendments under the said provisions can be made by the Union Parliament by simple majority.
That an amendment is made only by legislative process with or without conditions will be clear if two decisions of the Privy Council are considered in juxta position.
They are McCawley vs The King(1) and The Bribery Commissioner vs Pedrick Rana singhe(2).
The facts in McCawley vs The King(1) were these: In 1859 Queensland had been granted a Constitution in the terms of an Order in Council made on June 6 of that year under powers derived by Her Majesty from the Imperial Statute, 18 & 19 Vict.
(1) (2) 797 c. 54.
The Order in Council had set up a legislature for the territory, consisting of the Queen, a Legislative Council and a. Legislative Assembly, and the law making power was vested in Her Majesty acting with the advice and consent of the Council and Assembly.
Any laws could be made for the "peace, welfare and good government of the Colony".
The said legislature of Queensland in the year 1867 passed the Constitution Act of that year.
Under that Act power was given to the said legislature to make laws for "peace, welfare and good Government of the Colony in all cases whatsoever".
But, under section 9 thereof a two thirds majority of the Council and of the Assembly %,as required as a condition precedent to the validity of legislation altering the constitution,of the Council.
The Legislature, there fore, had, except in the case covered by section 9 of the Act, an unrestricted power to make laws.
The Legislature passed a law which conflicted with one of the existing terms of the Constitution Act.
Lord Birkenhead, L.C., upheld the law, as the Constitution Act conferred an absolute power upon the legislature to pass any law by majority even though it, in substance, amended the terms of the Constitution Act.
In The Bribery Commissioner vs Pedrick Ranasinghe(1), the facts are these : By section 29 of the Ceylon (Constitution) Order in Council, 1946, Parliament shall have power to make laws for the, "peace.
order and good government" of the Island and in the exercise of its power under the said section it may amend or repeal any of the provisions of the Order in its application to the Island.
The proviso to that section says that no Bill for the amendment or repeal of any of the provisions of the Order shall be presented for the Royal assent unless it has endorsed on it a certificate under the hand of the Speaker that the number of votes cast in favour thereof in the House of Representatives amounted to not less than two thirds of the whole number of members of the House.
Under section 55 of the said Order the appointment of Judicial Officers was vested in the Judicial Service Com mission.
But the Parliament under section 41 of the Bribery Amendment Act, 1958, provided for the appointment of the personnel of the Bribery Tribunals by the Governor General on the advice of the Minister of Justice.
The said Amendment Act was in conflict with the said section 55 of the Order and it was passed without complying with the terms of the proviso to section 29 of the Order.
The Privy Council held that the Amendment Act was void.
Lord Pearce, after considering McCawley 's case(2) made the following observations, at p. 1310 : ". . a legislature has no power to ignore, the conditions of law making that are imposed by the (1) ; (2) 1. 798 instrument which itself regulates its power to make law.
This restriction exists independently of the , question whether the legislature is sovereign, as is the legislature of Ceylon, or whether the Constitution is "uncontrolled", as the Board held the Constitution of Queensland to be.
Such a Constitution can, indeed, be altered or amended by the legislature, if the regulating instrument so provides and if the terms of those provisions are complied with. .
It will be seen from the said judgments that an amendment of the Constitution is made only by legislative process with ordinary majority or with special majority, as the case may be.
There.fore, amendments either under article 368 or under other Articles ,axe made only by Parliament by following the legislative process adopted by it ' n making other law,.
In the premises, an amendment "Of the Constitution can be nothing but "law".
A comparative study of other Constitutions indicates that no particular pattern is followed.
AR the Constitutions confer an ,express power to amend, most of them provide for legislative procedure with special majority, referendum, convention, etc., and a few with simple majority.
Indeed, Parliament of England, which is a supreme body, can amend the constitution like any other :statute.
As none of the Constitutions contains provisions similar to article 368 and article 13(2), neither the said Constitutions nor the decisions given by courts thereon would be of any assistance in construing the scope of article 368 of our Constitution.
A brief survey of the nature of the amending process adopted by various constitutions will bring out the futility of any attempt to draw inspiration from the said opinions or decisions on the said constitutions.
The nature of the amending power in different constitutions generally depends on the nature of the polity created by the constitution, namely, whether it is federal or unitary constitution or on the fact whether it is a written or an unwritten constitution or on the circumstances whether it is a rigid or a flexible constitution.
Particularly the difference can be traced to the "spirit and genius of the nation in which a particular constitution has its birth".
The following articles of the 'Constitution of the different countries are brought to our notice by one or other of the counsel that appeared before us.
article 5 of the Constitution of the United States of America, articles 125 and 128 of the Commonwealth of Australia Constitution Act, article 92 (1) of the British North American Act, section 152 of the South African Act, article 217 of the Constitution of, the United States of Brazil, Section 46 of the Constitution of Ireland, 1937, articles 207, 208 and 209 of the Constitution of the Union of Burma, article 88 ,of the Constitution of the Kingdom of Denmark Act, article 90 of 799 the Constitution of the French Republic, 1954, article 135 of the United States of Mexico, article 96 of the Constitution of Japan, article 112 of the Constitution of Norway, article 85 of the Constitution of the Kingdom of Sweden, articles 118, 119, 120, 121, 122 and 123 of the Constitution of the Swiss Federation, articles 140, 141 and 142 of the Constitution of Venezuela, and article 146 of the Constitution of the Union of Soviet Socialist Republics, 1936 and section 29(4) of Ceylon Constitution Order in Council, 1946.
Broadly speaking amendments can be made by four methods (i) by ordinary legislative process with or without restrictions, (ii) by the people through, referendum, (iii) by majority of all the units of a federal State; and (iv) by a special convention.
The first method can be in four different ways, namely, (i) by the ordinary course of legislation by absolute majority or by special majority, (See Section 92 (1 ) of the British North America Act, sub section 152 South African Apt, where under except sections 35, 137 and 152, other provisions could be amended by ordinary legislative process by absolute majority.
Many constitutions provide for special majorities.); (ii) by a fixed quorum of members for the consideration of the proposed amendment and a special majority for its passage; (see the defunct Constitution of Rumania), (iii) by dissolution and general election on a particular issue; (see the Constitutions of Belgium, Holland, Denmark and Norway), and (iv) by a majority of two Houses of Parliament in joint session as in the Constitution of the South Africa.
The second method demands a popular vote, referendum , or plebiscite as in Switzerland, Australia, Ireland, Italy, France and Denmark.
The third method is by an agreement in some form or other of either of the majority or of all the federating units as in Switzerland, Australia and the United States of America.
The fourth method is generally by creation of a special body ad hoc for the purpose of constitution revision as in Latin America.
Lastly, some constitutions impose express limitation on the power to amend.
(See article 5 of the United States Constitution and the Constitution of the Fourth French Republic).
A more elaborate discussion of this topic may be found in the American political Constitution by Strong.
It will, therefore, be seen that the power to amend and the procedure to amend radically differ from State to State; it is left to the constitution makers to prescribe the scope of the power and the method of amendment having regard to the requirements of the particular State.
There is no article in any of the constitutions referred to us similar to article 13(2) of our Constitution.
India adopted a different system altogether: it empowered the Parliament to amend the Constitution by the legislative process subject to fundamental rights.
The Indian 1 Constitution has made the amending process comparatively flexible, but it is made subject to fundamental rights.
800 Now let us consider the argument that the power to amend is a sovereign power, that the said power is supreme to the legislative power, that it does not permit any implied limitations and that amendments made in exercise of that power involve political questions and that, therefore, they are outside judicial review, This wide proposition is sought to be supported on the basis of opinions of jurists and judicial decisions.
Long extracts have been read to us from the book "The Amending of the Federal Constitution (1942)" by Lester Bernhardt Orfield, and particular reference was made to the following passages : "At the point it may be well to note that when the Congress is engaged in the amending process it is not legislating.
It is exercising a peculiar power bestowed upon it by Article Five.
This Article for the most part ,controls the process; and other provisions of the Constitution, such as those relating to the passage of legislation, having but little bearing.
" Adverting to the Bill of Rights, the learned author remarks that they may be repealed just as any other amendment and that they are no more sacred from a legal standpoint than any other part of the Constitution.
Dealing with the doctrine of implied limitations, he says that it is clearly untenable.
Posing the question 'Is other a law about the amending power of the Constitution ?", he answers, "there is none".
He would even go to the extent of saying that the sovereignty, if it can be said to exist at all, is located in the amending body.
The author is certainly a strong advocate of the supremacy of the amending power and an opponent of the doctrine of implied limitations.
His opinion is based upon the terms of article 5 of the Constitution of the United States of America and his interpretation of the decisions of the Supreme Court of America.
Even such an extreme exponent of the doctrine does not say that a particular constitution cannot expressly impore restrictions on the power to amend or that a court cannot reconcile the articles couched in unlimited phraseology.
Indeed article 5 of the American Constitution imposes express limitations on the amending power.
Some passages from the book "Political Science and Government" by James Wilford Garner are cited.
Garner points out : "An unamendable constitution, said Mulford, is the &&worst tyranny of time, or rather the very tyranny of time" But he also notices "The provision for amendment should be neither so rigid as to make needed changes practically impossible nor so flexible as to encourage frequent and 801 unnecessary changes and thereby lower the authority of the Constitution.
" Munro in his book "The Government of the United States", 5th Edition, uses strong words when he says ". . it is impossible to conceive of an unamendable constitution as anything but a contradiction in terms.
" The learned author says that such a constitution would constitute "government by the graveyards." Hugh Evander Wills in his book "Constitutional Law of the United States" avers that the doctrine of amendability of the Constitution is grounded in the doctrine of the sovereignty of the people and that it has no such implied limitations as that an amendment shall not contain a new grant of power or change the dual form of government or change the protection of the Bill of Rights, or make any other change in the Constitution.
Herman Finer in his book "The Theory and Practice of Modem Government" defines "constitution" as its process of amendment, for, in his view, to amend is to deconstitute and reconstitute.
The learned author concludes that the amending clause is so fundamental to a constitution that he is tempted to call it the constitution itself.
But the learned author recognizes that difficulty in amendment certainly products circumstances and makes impossible the surreptitious abrogation of rights guaranteed in the constitution.
William section Livingston in "Federalism and Constitutional Change" says : "The formal procedure of amendment is of greater importance than the informal processes, because it constitutes a higher authority to which appeal lies on any question that may arise.
" But there are equally eminent authors who express a different view.
In "American Jurisprudence", 2nd Edition, Vol.
16, it is stated that a statute and a constitution though of unequal dignity are both laws.
Another calls the constitution of a State as one of the laws of the State.
Cooley in his book on "Constitutional Law" opines that changes in the fundamental laws of the State must be indicated by the people themselves.
He further implies limitations to the amending power from the belief in the constitution itself, such as, the republican form of Government cannot be abolished as it would be revolutionary in ifs characters.
In the same book it is further said that the power to amend the constitution by legislative action does not confer the power to break it any more than it confers the power to legislate on any other subject contrary to the prohibitions.
C. F. Strong in his book "Modem Poliical Constitutions", 1963 edition, does not accept the theory of absolute sovereignty of the amending power which does not brook any limitations, for he says.
802 "In short, it attempts to arrange for the recreation of a constituent assembly whenever such matters are in future to be considered, even though that assembly be nothing more than the ordinary legislature acting under certain restrictions.
At the same time, there may be some elements of the constitution which the constituent assembly wants to remain unalterable by the action of any authority whatsoever.
These elements are to be distinguished from the rest, and generally come under the heading of fundamental law.
Thus, for example, the American Constitution, the oldest of the existing Constitutions, asserts that by no process of amendment shall any State, without its own consent, be deprived of its equal suffrage in the Senate, , while among the Constitutions more recently promulgated, those of the Republics of; France and Italy, each containing a clause stating that the republican form of government cannot be the subject of an amending proposals" it is not necessary to multiply citations from text books.
A catena of American decisions have been cited before us in support of the contention that the unending power is a supreme power or that it involves political issues which are not justiciable.
It would be futile to consider them.
at length, for after going through them carefully we find that there are no considered judgments of the American Courts, which would have a persuasive effect in that regard.
In the Constitution of the United States of America, prepared by Edwards section Corwin, Legislative Reference Service, Library of Congress, (1953 edn.), the following summary under the heading "Judicial Review under Article V" is given : "Prior to 1939, the Supreme Court had taken cognizance of a number of diverse objections to the validity of specific amendments.
Apart from holding that official notice of ratification by the several States was con clusive upon the Courts, it had treated these questions as justiciable, although it had uniformly rejected them on the merits.
In that year, however, the whole subject was thrown into confusion by the inconclusive decision in Coleman vs Miller.
This case came up on a writ of certiorari to the Supreme Court of Kansas to review the denial of a writ of mandamus to compel the Secretary of the Kansas Senate to erase an endorsement on a resolution ratifying the child labour amendment to the Constitution to re effect that it had been adopted by the Kansas Senate.
The attempted ratification was 803 assailed on three grounds : (1) that the amendment had been previously rejected by the State Legislature; (2) that it was no longer open to ratification because an unreasonable period of time thirteen years, had elapsed since its submission to the States, and (3) that the lieutenant governor had no right to cast the deciding vote in the Senate in favour of ratification.
Four opinions were written in the Supreme Court, no one of which commanded the support of more than four mem bers of the Court.
The majority ruled that the plain tiffs, members of the Kansas State Senate, had a sufficient interest in the controversy to give the federal courts jurisdiction to review the case.
Without agreement as to the grounds for their decision, a different majority affirmed the judgment of the Kansas court denying the relief sought.
Four members who concur red in the result had voted to dismiss the writ on the ground that the amending process "is political" in its.
entirety, from submission until an amendment becomes part of the Constitution, and is not subject to judicial guidance, control or interference at any point.
" whether the contention that the lieutenant governor should have been permitted to cast the deciding vote in favour of ratification presented a justiciable controversy was left undecided, the court being equally divided on the point.
In an opinion reported as "the opinion of the Court" ' but in which it appears that only three Justices concurred, Chief Justice Hughes declared that the writ of ' mandamus was properly denied because the question as to the effect of the previous rejection of the amendment and the lapse of time since it was submitted to the States were political questions which should be left to Congress.
On the same day, the Court dismissed a. writ of certiorari to review a decision 'of the Kentucky Court of Appeals declaring the action of the Kentucky General Assembly purporting to ratifying the child labour amendment illegal and void.
Inasmuch as the governor had forwarded the certified copy of the resolution to the Secretary of State before being served with a copy of the restraining order issued by the State Court, the Supreme Court found that there 'was no longer a controversy susceptible of judicial determination.
" This passage, in our view, correctly summarises the American law on the subject.
It will be clear therefrom that prior to 1939 the Supreme Court of America had treated the objections to the validity of specific amendments as justiciable and that only in 1939 it rejected them in an inconclusive judgment without 804 discussion.
In this state of affairs we cannot usefully draw much from the judicial wisdom of the Judges of the Supreme Court of America.
One need not cavil at the description of an amending power as sovereign power, for it is sovereign only within the scope of the power conferred by a particular constitution.
All the authors also agree, that a particular constitution can expressly limit the power of amendment, both substantive and procedural.
The only conflict lies in the fact that some authors do not pen nit implied limitations when the power of amendment is expressed in general words.
But others countenance such limitations by construction or otherwise.
But none of the authors goes to the extent of saying, which is the problem before us, that when there are conflicting articles couched in widest terms, the court has no jurisdiction to construe and harmonize them.
If some of the authors meant to say that in our view, they did not we cannot agree with them, for, in that event this Court would not be discharging its duty.
Nor can we appreciate the arguments repeated before us by learned counsel for the respondents that the amending process involves political questions which are, outside the scope of judicial review.
When a matter comes before the Court, its jurisdiction does not depend upon the nature of the question raised but on die, question whether the said matter is expressly or by necesssary implication excluded from its jurisdiction.
Secondly, it is not possible to define what is a political question and what is not.
The character of a question depends upon the circumstances and the nature of a political society.
To put if differently, the court does not decide any political question at all in the ordinary sense of the. term, but only ascertains whether Parliament is acting within the scope of the amending power.
It may be that Parliament seeks to amend the Constitution for political reasons, but the Court in denying that power will not be deciding on political questions, but will only be holding that Parliament has no power to amend particular articles of the Constitution for any purpose whatsoever, be it political or otherwise.
We, therefore, hold that there is nothing in the nature of the amending power which enables Parliament to override all the express or implied limi tations imposed on that power.
As we have pointed out earlier, our Constitution adopted a novel method in the sense that Parliament makes the amendment by legislative process subject to certain restrictions and,that the amendment so made being law" is.subject to article 13(2).
The next argument is based upon the expression "amendment" in article 368 of the Constitution and if is contended that the said 805 expression has .a
Positive and a negative content and that in exercise of the power amendment parliament cannot destroy the structure of the Constitution, but it can only modify the provisions thereof within the framework of the original instrument for its better effectuation.
If the fundamentals would be amenable to the ordinary process of amendment with a special majority, the argument proceeds, the institutions of the President can be abolished, the parliamentary executive can be removed, the fundamental rights can be abrogated, the concept of federalism ' can be obliterated and in short the sovereign democratic republic can be converted into a totalitarian system of government.
There is considerable force in this argument.
Learned and lengthy arguments are advanced to sustain it or to reject it.
But we are relieved of the necessity to express our opinion on this all important question as, so far as the fundamental rights are concerned, the question raised can be answered on a narrower basis.
This question may arise for consideration only if Parliament seeks to destroy the structure of the Constitution embodied in the provisions other than in Part III of the Constitution.
We do not, therefore, propose to express our opinion in that regard.
In the view we have taken on the scope of article 368 vis a vis the fundamental rights, it is also unnecessary to express our opinion on the question whether the amendment of the fundamental rights is covered by the proviso to article 368.
The result is that the Constitution (Seventeenth Amendment) Act, 1964, inasmuch as it takes away or abridges the funda mental rights is void under article 13(2) of the Constitution.
The next question is whether our decision should be given retrospective operation.
During the period between 1950 and 1967 i.e 17 years as many as 20 amendments were made in our Constitution.
But in the context of the present petitions it would be enough if we notice the amendments affecting fundamental right to property.
The Constitution came into force on January 26, 1950.
The Constitution (First Amendment) Act, 1951, amended articles 15 and 19, and articles 31 A and 31 B were inserted with retrospective effect.
The object of the amendment was said to be to validate the acquisition of zamindaries or the abolition of permanent settlement without interference from courts.
The occasion for the amendment was that the High Court of Patna in Kameshwar Singh v, State of Bihar(1) held that the Bihar Land Reforms Act (30 of 1950) passed by the State of Bihar was unconstitutional, while the High Courts of Allahabad and Nagpur upheld the validity of corresponding legislations in Uttar Pradesh and Madhya Pradesh respectively.
(1) A. I. R. 1951 Patna 91.
C.T.167 6 806 The amendment was made when the appeals from those decisions were pending in the Supreme Court.
In Sankari Prasad 's case(1) the constitutionality of the said amendment was questioned but the amendment was upheld.
It may be noticed that the said amendment was not made on the basis of the power to amend fundamental rights recognized by this Court but only in view of the conflicting decisions of High Courts and without waiting for the final decision from this Court.
article 31 A was again amended by the Constitution (Fourth Amendment) Act, 1955.
Under that amendment cl.
(2) of article 31 was amended and cl.
(2 A) was inserted therein.
While in the original article 31 A the general expression "any provisions of his Part" was found, in the amended article the scope was restricted only.to the violation of articles 14, 19 and 31 and 4 other clauses were included, namely, clauses providing for (a) taking over the management of any property by the State for a limited period; (b) amalgamation of two or more corporations; (c) extinguishment or modification of rights of person; interested in corporations; and (d) extinguishment or modification of rights accruing under any agreement, lease or licence relating to minerals, and the definition of "estate" was enlarged in order to include the interests of raiyats and under raiyats.
The expressed object of the amendment was to carry out important social welfare legislations on the desired lines, to improve the national economy of the State and to avoid serious difficulties raised by courts in that regard.
Article 31A has further been amended by the Constitution (Fourth Amendment) Act, 1955.
By the said amendment in the Ninth Schedule to the Constitution entries 14 to 20 were added.
The main objects of this amending Act was to distinguish the power of compulsory acquisition or requisitioning of private property and the deprivation of property and to extend the scope of article 31 A to cover different categories of social welfare legislations and to enable monopolies in particular trade or business to be created in favour of the State.
Amended article 31(2)makes the adequacy of compensation not justiciable.
It may be said that the Constitution (Fourth Amendment) Act, 1955 was made by Parliament as this Court recognized the power of Parliament to amend Part III of the Constitution; but it can ' also be said with some plausi bility that, as Parliament had exercised the power even before the.
decision of this Court in Sankari Prasad 's case(1), it would have amended the Constitution even if the said decision was not given by this Court.
The Seventeenth Amendment Act was made on June 20, 1964.
The occasion for this amendment was the decision of this Court in Karimbil Kunhikoman vs State of Kerala(2), which struck down the Kerala Agrarian Relations Act IV of 1961 relating to ryotwari lands.
Under that amendment the definition of the expression "estate" was enlarged so as to take (1) ; , 105 (2) [1962] Supp. 1 S.C.R. 829 807 in any land held under ryotwari settlement and any held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans.
In the Ninth Schedule the amendment included items 21 to 65.
In the objects and reasons it was stated that the definition" 'estate" was not wide enough, that the courts had struck down many land reform Acts and that, therefore, in order to give them protection the amendment was made.
The validity of the Seventeenth Amendment Act was questioned in this Court and was held to be valid in Sajian Singh 's case(1).
From the history of these amendments, two things appear, namely, unconstitutional laws were made and they were protected by the amendment of the Constitution or the amendments were made in order to protect the future laws which would be void but for the amendments.
But the fact remains that this Court held as early as in 1951 that Parliament had power to amend the fundamental rights.
It may, therefore, said that the Constitution (Fourth Amendment) Act, 1955, and the Constitution (Seventeenth Amendment) Act, 1964, were based upon the scope of the power to end recognized by this Court.
Further the Seventeenth Amendment Act was also approved by this Court.
Between 1950 and 1967 the Legislatures of various States made laws bringing about an agrarian revolution in our country zamindaries, inams and other intermediary estates were abolished, vested rights were created in tenants, consolidation of holdings of villages was made, ceilings were fixed and the surplus lands transferred to tenants.
All these were done on the, basis of the correctness of the decisions in Sankari Prasads case(2) and Sajjan Singh 's case(1), namely, that Parliament had the power to amend the fundamental rights and that Acts in regard to estates were outside judicial scrutiny on the ground they infringed the said rights.
The agrarian structure of our country has been revolutionised on the basis of the said laws.
Should we now give retrospectivity to our decision, it would introduce chaos and unsettle the conditions in our country.
Should we hold that because of the said consequences Parliament had power to take away fundamental rights, a time might come when we would gradually and imperceptibly pass under a totalitarian rate.
Learned counsel for the petitioners as well as those for the respondents placed us on the horns of this dilemma, for they have taken extreme positions leamed counsel for the petitioners want us to reach the logical position by holding that all the said laws are void and the learned counsel for the respondents persuade us to hold that Parliament has unlimited power and, if it chooses, it can do away with fundamental rights.
We do not think that (1) ; (2) ; , 808 this Court is so helpless.
As the highest Court in the land we must evolve some reasonable principle to meet this extraordinary situation.
There is an essential distinction between Constitution and statutes.
Comparatively speaking, Constitution is permanent; it is an organic statute; it grows by its own inherent force.
The constitutional concepts are couched in elastic terms.
Courts are expected to and indeed should interpret, its terms without doing violence to the language, to suit the expanding needs of the society.
In this process and in a real sense they make laws.
Though it is not admitted, the said role of this Court is effective and cannot be ignored.
Even in the realm of ordinary statutes, the subtle working of the process is apparent though the approach is more conservative and inhibitive.
In the constitutional field, therefore, to meet the present extraordinary situation that may be caused by our decision, we must evolve some doctrine which has roots in reason and precedents so that the past may be preserved and the future protected.
There are two doctrines familiar to American Jurisprudence, one is described as Blackstonian theory and the other as "prospective over ruling", which may have some relevance to the present enquiry.
Blackstone in his Commentaries, 69 (15th edn., 1809) stated the common law rule that the duty of the Court was "not to pronounce a new rule but to maintain and expound .the old one".
It means the Judge does not make law but only discovers or finds the true law.
The law has always been the same.
If a subsequent decision changes the earlier one, the latter decision does not make law but only discovers the correct principle of law.
The result of this view is that it is necessarily retrospective ,operation.
But Jurists, George F. Canfield, Robert Hill Freeman, John Henry Wigmore and Cardozo, have expounded the doctrine of "prospective over ruling" and suggested it as "a useful judicial .tool".
In the words of Canfield the said expression means ". a court should recognize a duty to an nounce a new and better rule for future transactions whenever the court has reached the conviction that an old rule (as established by the precedents) is unsound even though feeling compelled by stare decisis to apply the old and condemned rule to the instant case and to transactions which had already taken place.
" Cardozo, before he became a Judge of the Supreme Court of the United States of America, when he was the Chief Justice of New York State addressing the Bar Association said thus The rule (the Blackstonian rule) that we are asked to apply is out of tune with the life about us.
It has been made discordant by the forces that generate a 809 living law.
We apply it to this case because the repeal might work hardship to those who have trusted to its existence.
We give notice however that any one trusting to it hereafter will do at his peril.
" The Supreme Court of the United States of America, in the year 1932, after Cardozo became an Associate Justice of that Court in Great Northern Railway vs Sunburst Oil & Ref.
Co.,(1) applied the said doctrine to the facts of that case.
In that case the Montana Court had adhered to its previous construction of the statute in question but had announced that that interpretation would not be followed in the future.
It was contended before the Supreme Court of the United States of America that a decision of a court over ruling earlier decision and not giving its ruling retroactive operation violated the due process clause of the 14th Amendment.
Rejecting that plea, Cardozo said : "This is not a case where a Court in overruling an earlier decision has come to the new ruling of retroactive dealing and thereby has made invalid what was followed in the doing.
Even that may often be done though litigants not infrequently have argued to the contrary .
This is a case where a Court has refused to make its ruling retroactive, and the novel stand is taken that the Constitution of the United States is infringed by the refusal.
We think that the Federal Constitution has no voice upon the subject.
A state in defining the elements of adherence to precedent may make a choice for itself between the principle of forward operation and that of relation backward.
It may be so that the decision of the highest courts, though later over ruled, was law nonetheless for intermediate transactions .
On the other hand, it may hold to the ancient dogma that the law declared by its Courts had a platonic or ideal existence before the act of declara tion, in which event, the discredited declaration will be viewed as if it had never been and to reconsider declaration as law from the beginning.
The choice for any state maybe determined by the juristic philosophy of the Judges of her Courts, their considerations of law, its origin and nature.
" The opinion of Cardozo tried to harmonize the doctrine of prospective over ruling with that of stare decisis.
In 1940, Hughes, C.J., in Chicot County Drainage District vs Baxter State Bank(2) stated thus (1) ; , 366. ; (2) ; 810 "The law prior to the determination of unconstitutionality is an operative fact and may have consequences which cannot justly be ignored.
The past cannot always be erased by a new judicial declaration.
" In Griffin vs Illionis(1) the Supreme Court of America reaffirmed the doctrine laid down in Sunburst 's case (2).
There, a statute required defendants to Submit bills of exceptions as a pre requisite to an appeal from a conviction; the Act was held unconstitutional in that it provided no means whereby indigent defendants could secure a copy of the record for this purpose.
Frankfurter, J., in that context observed ". in arriving at a new principle, the judicial process is not important to, define its scope and limits.
Adjudication is not a mechanical exercise nor does it compel 'either/or ' determination." In Wolf vs Colorado(3) a majority of the Supreme Court held that in a prosecution in a State Court for a state crime, the 14th Amendment did not forbid the admission of evidence obtained by an unreasonable search and seizure.
But in Mapp.
vs Ohio(4) the Supreme Court reversed that decision and held that all evidence obtained by searches and seizure in violation of the 4th Amendment of the Federal Constitution was, by virtue of the due process clause of the 14th Amendment guaranteeing the right to privacy free from unreasonable State instrusion, inadmissible in a State court.
In Linkletter vs Walker(5) the question arose whether the exclusion of the rule enunciated in Mapp vs Ohio(4) did not apply to State Court convictions which had become final before the date of that judgment.
Mr. Justice Clarke, speaking for the majority observed "We believe that the existence of the Wolf doctrine prior to Mapp is 'an operative ' fact and may have consequences which cannot justly be ignored.
The past cannot always be erased by a new judicial declaration." "Mapp had as its prima purpose the enforcement of the Fourth Amendment through the inclusion of the exclusionary rule within its rights. . .
We cannot say that this purpose would be advanced by making the rule retrospective.
The misconduct of the police prior to Mapp has already occurred and win (1) [1956]351U.S.12,2. (2) (1932) 287 U. section 358,366: ; (3) ; 193L.Ed. 872.
(4) ; 6 L. Ed.
(5) ; 1081.
811 not be corrected by releasing the prisoners involved.
On the other hand, the States relied on Wolf and followed its command.
Final judgments of conviction were entered prior to Mapp.
Again and again the Court refused to reconsider Wolf and gave its implicit approval to hundreds of cases in their application of its rule.
In rejecting the Wolf doctrine as to, the exclusionary rule the purpose was to deter the lawless action of the police add to effectively enforce the Fourth Amendment.
That purpose will not at this late date be served by the wholesale release of the guilty victims." "Finally, there are interests in the, administration of justice and the integrity of the judicial process to consider.
To make the rule of Mapp retrospective would tax the administration of justice to the utmost.
Hearings would have to be held on the excludability of evidence long since destroyed, misplaced or deteriorated.
If it is excluded, the witness available at the time of the original trial will not be available or if located their memory will be dimmed.
To thus legitimate such an extraordinary procedural weapon that has no bearing on guilt would seriously disrupt the administration of justice.
" This case has reaffirmed the doctrine of prospective overruling and has taken a pragmatic approach in refusing to give it retroactivity.
In short, in America the doctrine of prospective overruling is now accepted in all branches of law, including constitutional law.
But the carving of the limits of retrospectivity of the new rule is left to courts to be done, having regard to the requirements of justice.
Even in England the Blackstonian theory was criticized by Bentham and Austin.
In Austin 's Jurisprudence, 4th Ed., at page 65, the learned author says : "What hindered Blackstone was 'the childish fiction ' employed by our judges, that the judiciary or common law is not 'Made by them, but is a miraculous something made, by nobody, existing, I suppose, from eternity, and merely declared from time to time by the Judges." Though English Courts in the past accepted the Blackstonian theory and though the House of Lords strictly adhered to the doctrine of 'precedent ' in the earlier years, both the doctrines were practically given up by the "Practice Statement (Judicial Precedent)" issued by the House of Lords recorded in (1966) 1 W.L.R. 1234.
Lord Gardiner L.C., speaking for the House of Lords made the following observations 812 "Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law.
They propose, therefore, to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.
In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law." This announcement is not intended to affect the use of precedent elsewhere than in this House.
" It will be seen from this passage that the House of Lords hereafter in appropriate cases may depart from its previous decision when it appears right to do so and in so departing will bear in mind the danger of giving effect to the said decision retroactivity.
We consider that what the House of Lords means by this statement is that in differing from the precedents it will do so only without interefering with the transactions that had taken place on the basis of earlier decisions.
This decision, to a large extent, modifies the Blackstonian theory and accepts, though not expressly but by necessary implication the doctrine of "prospective overruling.
" Let us now consider some of the objections to this doctrine.
The objections are: (1) the doctrine involved legislation by courts; (2) it would not encourage parties to prefer appeals as they would not get any benefit therefrom; (3) the declaration for the future would only be obiter, (4) it is not a desirable change; and (5) the doctrine of retroactivity serves as a brake on court which otherwise might be tempted to be so fascile in overruling.
But in our view, these objections are not insurmountable.
If a court can over rule its earlier decision there cannot be any dis pute now that the court can do so there cannot be any valid reason why it should not restrict its ruling to the future and not to the past.
Even if the party filing an appeal may not be benefited by it, in similar appeals which he may file after the change in the law he will have the benefit.
The decision cannot be obiter for what the court in effect does is to declare the law but on the basis of another doctrine restricts its scope.
Stability in law does not mean that injustice shall be perpetuated.
An illuminating article on the subject is found in Pennsylvania Law Review, [Vol.
I 10 p. 650].
813 It is a modem doctrine suitable for a fast moving society.
It does not do away with the doctrine of stare decisis, but confines it to past transactions.
It is true that in one sense the court only declares the law, either customary or statutory or personal law.
While in strict theory it may be said that the doctrine involves making of law, what the court really does is to declare the law but refuses to give retroactivity to it.
It is really a pragmatic solution reconciling the two conflicting doctrines, namely, that a court finds law and that it does make law.
It finds law but restricts its operation to the future.
It enables the court to bring about a smooth transition by correcting its errors without disturbing the impact of those errors on the past transactions.
It is left to the discretion of the court to prescribe the limits of the retroactivity and thereby it enables it to would the relief to meet the ends of justice.
In India there is no statutory prohibition against the court refusing to give retroactivity to the law declared by it.
Indeed,.
the doctrine of res judicata precludes any scope for retroactivity in respect of a subject matter that has been finally decided between the parties.
Further, Indian court by interpretation reject retroactivity.
to statutory provisions though couched in general terms on the ground that they affect vested rights.
The present case only attempts a further extension of the said rule against retroactivity.
Our Constitution does not expressly or by necessary implica tion speak against the doctrine of prospective over ruling.
Indeed, articles 32, 141 and 142 are couched in such wide and elastic terms as to enable this Court to formulate legal doctrines to meet the ends of justice.
The only limitation thereon is reason, restraint and injustice.
Under article 32, for the enforcement of the fundamental rights the Supreme Court has the power to issue suitable directions or orders or writs.
Article 141 says that the law declared by the Supreme Court shall be binding on all courts; and article 142 enables it in the exercise of its jurisdiction to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it.
These articles are designedly made comprehensive to enable the Supreme Court to declare law and to give such directions or pass such orders as are necessary to do complete justice.
The expression "declared" is wider than the words "found or made".
To declare is to announce opinion.
Indeed, the latter involves the process, while the former expresses result.
Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as law.
The law declared by the Supreme Court is the law of the and.
If so, we do not see any acceptable reason why it, in declaring the law in superses 814 sion of the law declared by it earlier, could not restrict the operation of the law as declared to future and save the transactions, whether statutory or otherwise that were effected on the basis of the earlier law.
To deny this power to the Supreme Court on the basis of some outmoded theory that the Court only finds law but does not make it is to make ineffective the powerful instrument of.
justice placed in the hands of the highest judiciary of this country.
As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different ,circumstances, we would like to move warily in the beginning.
We would lay down the following propositions : (I) The doctrine of prospective over ruling, can be invoked only in matters arising under our Constitution; (2 it an be applied only by the highest court of the country, i.e., the Supreme Court as it has the constitutional jurisdiction to declare an binding on all the courts in India; (3) the scope of the retroactive operation of the law declared by the Supreme Court superseding its earlier decisions .is left to its discretion to be moulded in accordance with the justice of the cause or matter before it.
We have arrived at two conclusions, namely, (1) Parliament has no power to amend Part III of the Constitution so as to take away or abridge the fundamental rights; and (2) this is a fit case to invoke and apply the doctrine or prospective overruling.
What then is the effect of our conclusion on the instant case ?.
Having regard to the history of the amendments their impact on the social and economic affairs of our country and the chaotic situation that may be brought about by the sudden withdrawal at this stage of the amendments from the Constitution, we think that considerable judicial restraint is called for.
We, therefore, declare that our decision will not affect the validity of the Constitution (Seventeenth Amendment) Act, 1964, or other amendments made to the Constitution taking away or abridging the fundamental rights.
We further declare that in future Parliament will have no power to amend Part III of the Constitution so as to take away or abridge the fundamental rights.
In this case we do not propose to express our opinion on the question of the scope of the amendability of the provisions of the Constitution other than the fundamental rights, as it does not arise for consideration before us.
Nor are we called upon to express out opinion on the question regarding the scope of the amends ability of Part Ill of the constitution otherwise than by taking away or abridging the fundamental rights.
We will not also in dicate our view one way or other whether any of the Acts questioned can be sustained under the provisions of the Constitution without the aid of articles 31A, 31B and the 9th Schedule.
815 The aforesaid discussion leads to the following results (1) The power of the Parliament to amend the Constitution is derived from articles 245, 246 and 248 of the Constitution and not from article 368 thereof which only deals with procedure.
Amendment is a legislative process.
(2) Amendment is 'law ' within the meaning of article 13 of the Constitution and, therefore, if it takes away or abridges the rights conferred by Part III thereof, it is void.
(3) The Constitution (First Amendment) Act, 1951, Constitution (Fourth Amendment) Act, 1955, and,the Constitution (Seventeenth Amendment) Act, 1964, abridge the scope.
of the fundamental rights.
But, on the basis of earlier decisions of this Court, they were valid.
(4) On the application of the doctrine of 'prospective over ruling ', as explained by us earlier, our decision will have only prospective operation and, therefore, the said amendments will continue to be valid.
(5) We declare that the Parliament will have no power from the date of this decision to amend any of the provisions of Part III of the Constitution so as to take away or abridge the fundamental rights enshrined therein.
(6) As the Constitution (Seventeenth Amendment) Act holds the field, the validity of the two impugned Acts, namely, the Punjab Security of Land Tenures Act X of 1953, and the Mysore Land Reforms Act X of 1962, as amended by Act XIV of 1965, cannot be questioned on the ground that they offend articles 13, 14 or 31 of the Constitution.
Before we close, it would be necessary to advert to an argu ment advanced on emotional plane.
It was said that if the provisions of the Constitution could not be amended it would lead to revolution.
We have not said that the provisions of the Constitution cannot be amended but what we have said is that they cannot be amended so as to take away or abridge the fundamental rights.
Nor can we appreciate the argument that all the agrarian reforms which the Parliament in power wants to effectuate cannot be brought about without amending the fundamental rights.
It was exactly to prevent this attitude and to project the rights of the that the fundamental rights were inserted in the Constitution.
If it is the duty of the Parliament to enforce the directive principles, it is equally its duty to enforce them without infringing the fundamental rights.
The Constitution makers thought that it could be done and we also think that the directive prin 816 ciples can reasonably be enforced within the self regulatory machinery provided by Part III.
Indeed both Parts III and IV of the Constitution form an integrated scheme and is elastic enough to respond to the changing needs of the society.
The verdict of the Parliament on the scope of the law of social control of fundamental rights is not final, but justiciable.
If not so, the whole scheme of the Constitution will break.
What we can I not understand is how the enforcement of the provisions of the Constitution can bring about a revolution.
History shows that revolutions are brought about not by the majorities but by the minorities and some time by military coups.
The existence of an all comprehensive amending power cannot prevent revolutions, if there is chaos in the country brought about by mis rule or abuse of power.
On the other hand, such a restrictive power gives stability to the country and prevents it from passing under a totalitarian or dictatorial regime.
We cannot obviously base our decision on such hypothetical or extraordinary situations which may be brought about with or without amendments.
Indeed, a Constitution is only permanent and not eternal.
There is nothing to choose between destruction by amendment or by revolution, the former is brought about by totalitarian rule, which cannot brook constitutional checks and the other by the discontentment brought about by mis rule.
If either happens, the constitution will be a scrap of paper.
Such considerations are out of place in construing the provisions of the Constitution by a court of law.
Nor are we impressed by the argument that if the, power of amendment is 'not all comprehensive there will be no way to change the structure of our Constitution or abridge the fundamental rights even if the whole country demands for such a change.
Firstly, this visualizes an extremely unforeseeable and extravagant demand; but even if such a contingency arises the residuary power of the Parliament may be relied upon to call for a Constituent Assembly for making a new Constitution or radically changing it.
The recent Act providing for a poll in Goa, Daman and Diu is an instance of analogous exercise of such residuary power by the Parliament.
We do not express our final opinion on this important question.
A final appeal is made to us that we shall not take a different view as the decision in Sankari Prasad 's case(1) held the field for many years.
While ordinarily this Court will be reluctant to reverse its previous decision, it is its duty in the constitutional field to correct itself as early as possible, for otherwise the future progress of the country and the happiness of the people will be at stake.
As we are convinced that the decision in Sankari Prasad 's case(1) is wrong, it is pre eminently a typical case where this Court should over rule it.
The longer it holds the field the greater will (1) ; , 105 817 be the scope for erosion of fundamental rights.
As it contains the seeds of destruction of the cherished rights of the people the sooner it is over ruled the better for the country.
This argument is answered by the remarks made by this Court in the recent judgment in The Superintendent and Legal Remembrancer State of West Bengal vs, The Corporation of Calcutta(1).
"The third contention need not detain us ] 'or it has been rejected by this Court in The Bengal Immunity Company Limited vs The State of Bihar(2) .
There a Bench of 7 Judges unanimously held that there was nothing in the Constitution that prevented the Supreme Court from departing from a previous decision of its own if it was satisfied of its error and of its baneful effect on the general interest of the public.
If the aforesaid rule of construction accepted by this Court is in consistent with the legal philosophy of our Constitution, it is our duty to correct ourselves and lay down the right rule.
In constitutional matters which affect the evolution of our polity, we must more readily do so than in other branches of law, as perpetuation of a mistake will be harmful to public interests.
While continuity and consistency are conducive to the smooth evolution of the rule of law, hesitancy to set right deviation will retard its growth.
In this case, as we are satisfied that the said rule of construction is inconsistent with our republican polity and, if accepted, bristles with anomalies, we have no hesitation to reconsider our earlier decision." In the result the petitions are dismissed, but in the circumstances without costs.
Wanchoo, J.
This Special Bench of eleven Judges of this Court has been constituted to consider the correctness of the decision of this Court in Sri Sankari Prasad Singh Deo vs Union of India(,,) which was accepted as correct by the majority in Sajjan Singh vs State of Rajasthan (4) .
The reference has been made in three petitions challenging the constitutionality of the Seventeenth Amendment to the Constitution.
In one of the petitions, the inclusion, of the Punjab Security of Land Tenures Act, (No. X of 1953) in the Ninth Schedule, which makes it immune from.
attack under any provisions contained in Part III of the Constitution ' has been attacked on the ground that the Seventeenth Amendment is in itself unconstitutional.
In the other two petitions, the inclusion of the Mysore Land Reforms Act, (No. 10 of 1962) has been attacked on the same grounds.
It is not necessary to set out the facts in (1) ; ,176 (2) [1955] 2S.C.R.603.
(3) ; (4) [1965] 1.C.S.R. 933. 818 the three petitions for present purposes.
The main argument in all the three petitions has been as to the scope and effect of article 368 of the Constitution and the power conferred thereby to amend the Constitution.
Before we come to the specific I points raised in the present petitions, we may indicate the circumstances in which Sankari Prasad 's case(1) as well as Sajjan Singh 's case (2) came to be decided and what they actually decided.
The Constitution came into force on January 26,.1950.
It provides in Part III for certain fundamental rights.
Article 31 which is in Part 111, as it originally stood, provided for compulsory acquisition of property.
By clause (1) it provided that "no person shall be deprived of his property save by authority of law".
Clause (2) ;hereof provided that any law authorising taking of Possession or acquisition of property must provide for compensation therefor and either fix the amount of compensation or specify the principles on which, and the manner in which the compensation was to be determined and paid.
Clause(4) made a special provision to the effect that if any Bill pending at the commencement of the Constitution in the Legislature of a State had, after it had been passed by such Legis lature, been reserved for the consideration of the President and had received his assent, then such law would not be called in question though it contravened the provisions of cl.
(2) relating to compensation.
Clause (6) provided that any law of the State enacted not more than eighteen months before the Constitution might be submitted to the President for his certification, and if so certified, it could not be called in question on the ground that it contravened the provision of cl.
(2) of article 31 relating to compensation.
These two clauses of article 31 were meant to safeguard legislation which either had been passed by Provincial or State legislatures or which was on the anvil of State legislatures for the purpose of agrarian reforms.
One such piece of legislation was the Bihar Land Reforms Act, which was passed in 1950.
That Act received the assent of the President as required under cl.
(6) of article 31.
It was however challenged before the Patna High Court and was struck down by that court on the ground that it violated Art ' 14 of the Constitution.
Then there was an appeal before this Court, but while that appeal was pending, the First Amendment to the Constitution was made.
We may briefly refer to what the First Amendment provided for.
It was the First Amendment which was challenged and was upheld in Sankari Prasad 's case(1).
The First Amendment contained a number of provisions; but it is necessary for present purposes only to refer to those provisions which made changes in Part III of the Constitution.
These changes related to articles 15 (1) ; (2) ; 819 and 19 and in addition, provided for insertion of two Articles, numbered 31 A and 31 Bin Part III Article 31 A provided that no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights shall be deemed to be void on the ground that it was.
inconsistent with, or took away or abridged any of the rights conferred by any provision in part Ill. 'The word "estate" was also defined for the purpose of article 31 A Further Article 31 B. provided for validation of certain Acts and Regulations and specified such Acts and Regulations in the Ninth Schedule, which was for the first time added to the Constitution.
The Ninth Schedule then contained 13 Acts, all relating to estates , passed by various legislatures of the Provinces or States.
It laid down that those Acts and Regulations would not be deemed to be void or ever to have become void, on the ground that they were inconsistent with.
or took away or abridged any of the rights conferred by any provision of Part III.
It further provided that notwithstanding any judgment, decree or order of any court or tribunal to the contrary, all such Acts and Regulations subject to the power of any competent legislature to repeal or amend them, continue in force.
This amendment, and in particular articles 31 A and 31 B were.
immediately challenged by various writ petitions in this Court and these came to be decided on October 5, 1951 in Sankari Prasad 's case(1).
The attack on the validity of the First Amendment was made on various grounds; but three main grounds which were.
taken were, first 1 , that amendments to the Constitution made under article 368 were liable to be tested under article 13(2); secondly that in any case as articles 31 A and 31 B insert the Constitution by the First.
Amendment affected the power of the High Court under article 226 1 and of this Court under Articles 132 and 136; the amendment required ratification under the proviso to article 368; and, thirdly that Acts.
31 A and 31 B were invalid on the ground that they related to matters covered by the State List, namely, item 18 of List 11, and could not therefore be passed by Parliament.
This Court rejected all the three contentions.
It held that although ."law" would ordinarily include constitutional law, there was a clear demarcation between ordinary law made in the exercise of legislative power and constitutional law made in the exercise of constituent power, and in the context of article 13, "law" must be taken to mean rules or regulations made.
in exercise of ordinary legislative power and not amendments to, the Constitution made in the exercise of constituent power; in consequence article 13(2) did not affect amendments made under article 3 68.
It further held that articles 3 1 A and 31 B did not curtail the power of the High Court under article 226 or of this court under articles 132 and 136 and did not require ratification under the (1) ; 820 proviso contained in article 368.
Finally, it was held that articles 31.
A and 31 B were essentially amendments to the Constitution and Parliament as such had the power to enact such amendments.
In consequence, the First Amendment to the Constitution was upheld as valid.
After this decision, there followed sixteen more amendment .to the Constitution till we come to the Seventeenth Amendment, which was passed on June 20, 1964.
There does not seem to have been challenge to any amendment up to the Sixteenth Amendment, even though two of them, namely, the Fourth Amendment and the Sixteenth Amendment,, contained changes in the provisions of Part III of the Constitution.
Further the nature of these amendments was to add to, or alter or delete various other provisions of the Constitution contained in Part III thereof On December 5, 1961 came the decision of this Court by which the Kerala Agrarain Reforms Act (No. 4 of 1961), passed by the Kerala legislature, was struck down, among other grounds, for the reason that ryotwari lands in South India were not estates within the meaning of article 31 A and therefore acquisition of reyotwari land was not protected under article 31 A of the Constitution : [see Karimbil Kunhikoman vs State of Kerala(1)].
This decision was followed by the Seventeenth Amendment on June 20, 1964.
By this amendment, changes were made in article 31 A of the Constitution and 44 Acts were included in the Ninth Schedule to give them complete protection from attack under any provision of Part III of the Constitution.
Practically all these Acts related to land tenures and were concerned with agrarian reforms.
This amendment was challenged before this 'Court in Sajjan Singh 's case(2).
The points then urged were that as article 226 was likely to be affected by the Seventeenth Amendment, it required ratification under the proviso to article 368 and that the decision in Sankari Prasads case(3) which had negatived this contention required re consideration.
It was also urged that the Seventeenth Amendment was legislation with respect to land and Parliament bad no right to legislate in that behalf, and further that as the Seventeenth Amendment provided that the Acts put in the Ninth Schedule would be valid in spite of the decision of the Courts, it was unconstitutional.
This Court by a majority of 3 to 2 upheld the correctness of the decision in Sankari Prasad 's case(,,).
It further held unanimously that the Seventeenth Amendment did not require ratification under the proviso to article 368 because of its indirect effect on article 226, and that Parliament in enacting the Amendment was not legislating with respect to land and that it was open to Parliament to validate legislation which had been invalid by courts.
Finally this Court held by majority (1) [1962] Supp. 1 S.C.R. 829.
(2) ; (3) ; 821 that the power conferred by article 368 included the power to take away fundamental rights guaranteed by Part HI and that the power to amend was a very wide power and could not be controlled by the literal dictionary meaning of the word "amend" and that the word "law" in article 13 (2) did not include an amendment of the Constitution made in pursuance of article 368.
The minority however doubted the correctness of the view taken in Sankari Prasads case(1) to the effect that the word 'law" in article 13 (2) did not include amendment to the Constitution made under article 368 and therefore doubted the competence of Parliament to make any amendment to Part III of the Constitution.
One of the learned Judges further doubted whether making a change in the basic features of the Constitution could be regarded merely as an amendment or would, in effect, be re writing a part of the Constitution, and if so, whether it could ' be done under article 368.
It was because of this doubt thrown on the correctness of the view taken in Sankari Prasad 's case(1) that the present reference has been made to this Special Bench.
As the question referred to this Bench is of great constitutional importance and affected legislation passed by various States, notice was issued to the Advocates General of all States and they have appeared and, intervened before us.
Further a number of persons who were also affected by the Seventeenth Amendment have been permitted to intervene.
The arguments on behalf of the petitioners and the interveners who support them may now.
be briefly summarised.
It is urged that article 368 when it provides for the amendment of the Constitution merely ' contains the procedure for doing so and that the power to make amendment has to be found.
in article 248 read with item 97 of List 1.
It is further urged that the word "amendment" in article 368 means that the provisions in the Constitution can be changed so as to important upon them And that this power is of a limited character and does not authorise Parliament to make any addition to, alteration of or deletion of any ,provision of the Constitution, including the provision contained in Part III.
So article 368 authorises only those amendments which have the effect of improving the Constitution.
Then it is urged that amendment permissible under article 368 is subject to certain implied limitations and the these limitations are that basic features of the Constitution cannot be amended at all.
An attempt was made to indicate some of these basic features, as, f( example, the provisions in Part III, the federal structure, the republican character of the State, elected Parliament and State Legislatures on the basis of adult suffrage, control by the judiciary and so on, and it is.
said that an amendment under article 3 69 is subject to the implied limi (1) (1952] S.C.R. 89.
L3Sup.
CI/67 7 822 tations that these basic features and others of the kind cannot be, changed.
Thus in effect the argument is that there is a very limited power of amendment under the Constitution.
It is further urged that apart from these implied limitations, there is an express limitation under article 13(2) and the word "law in that Article includes an amendment of the Constitution.
The argument thus in the alternative is that as the word "law" in article 13(2) includes a constitutional amendment, no amendment can be made in Part HI under article 368 which would actually take away or abridge the rights guaranteed under that Part.
In effect, it is said that even if there are no implied limitations to amend the Constitution under article 368, article 13(2) is an express limitation insofar as the power to amend Part III is concerned and by virtue of article 13(2) the rights guaranteed under Part III cannot be taken away or abridged under article 368, though it is conceded that Part III may be amended by way of enlarging the rights contained therein.
Another line of argument is that in any case it was necessary to take action under the proviso to article 368 and as that was not done the Seventeenth Amendment is not valid.
It is urged that article 2,26 is seriously affected by the provisions contained in the Seventeenth Amendment and that amounts to an amendment of Aft.
226 and in consequence action under the proviso was necessary.
It is also urged that article 245 was addition of a number of Acts in the Ninth 13 (2) and therefore also it was necessary to take action under the proviso.
It is further urged that it was not competent for Parliament to amend the Constitution by putting a large number of Acts in the Ninth Schedule as the power to legislate with respect to land is solely within the.
competence of State Legislatures and that is another reason why the addition to the Ninth Schedule read with article 31 B should be struck down.
Lastly an argument had been advanced which we may call the argument of fear.
It is said that if Art.368 is held to confer full to amend each and every part of the Constitution as has been held in Sankari Prasad 's case(1).
Parliament May do all kinds of things, which were never intended, under this unfettered power and may, for example, abolish elected legislatures, abolish the President or change the present form of Government into a Presedential type like the United States.
Constitution or do away with the federal structure altogether.
So it is urged that, we should,interpret article 368 in such a way that Parliament may not be able to do all these things.
In effect this argument of fear has been put forward to reinforce the contention that this Court should (1)[1952] S.C.R. 89.
823 hold that there are some implied limitations on the amending power and these implied limitations should be that there is no power any where in the Constitution to change the basic features of the Constitution to which reference has already been made.
This is in brief the submission on behalf of the petitioners and the interveners who support them.
The submission on behalf of the Union of India and the States may now be summarised.
It is urged that article 368 not only provides procedure or amendment but also contains in it the power to amend the Constitution.
It is further urged that the word "amendment" in law does not merely mean making such changes in the Constitution as would improve it but includes the power to make any addition to the Constitution, any alteration of any of the existing provisions and its substitution by another provisions, and any deletion of any particular provision of the Constitution.
In .effect, it is urged that even if the word "amendment" used in article 368 does not take in the power to abrogate the entire 'Constitu tion and replace it by another new Constitution, it certainly means that any provisions of the Constitution may be changed and this change can be in the form of addition to, alteration of or deletion of any provision of the Constitution.
So long therefore as the Constitution is not entirely abrogated and replaced by a new Constitution at one stroke, the power of amendment would enable Parliament to make all changes in the existing Constitution by addition, alteration or deletion.
Subject only to co repeal being not possible, the power of amendment contained in article 368 is unfettered.
It is further urged that there can be no implied limitations on the power to amend and the limitations if any on this.
power must be found hi express terms in the Article providing for amendment.
It is conceded that there may be an express limitation not merely in the Article providing for amendment, but in some other part of the Constitution.
But it is said that if that is so, there must be a clear provision to that effect.
In the absence of express limitations, therefore, there can be no implied limitations ,on the power to amend the Constitution contained in article 368 and that power will take in all changes whether by way of addition, alteration or deletion, subject only to this that the power of amendment may riot contain the, power to abrogate and repeal the entire Constitution and substitute it with a new one.
It is then urged that there is no express provision in Art.368 itself so far as any amendment relating to the substance of the amending power is concerned , die only limitations in Art, 368 are as to procedure and courts can only see that the procedure as indicated in article 368 is followed before an amendment can be said to be valid.
It is further urged that the word "law", in article 13 does not include an amendment of the Constitution and only 824 moans law as made.
under the legislative provisions contained in Chapter, I of Part XI read with, Chapters II and III of Part V of the.
Constitution and Chapters III and V of Part VI thereof.
In effect it is a law which is made under the Constitution which included in the word "law" in article 13(2) and not an amendment to the Constitution under article 368.
As to Articles 226 and 245 and the necessity of taking action under the proviso to article 368, it is urged that there is no change in articles 226 and 245on account of any provision in the Seventeenth Amendment and therefore no action under the proviso was necessary.
it is only direct change in articles 226 and 245 which would require following the procedure as to ratification or at any rate such change in other Articles which would have the effect of directly compelling change in Arts 226 and 245 and that in the present case no such direct compulsion arises.
Lastly as to the argument of fear it is urged that there is always a provision with respect to amendment in written federal Constitutions.
Such a provision may be rigid or flexible.
In our Constitution article 368 provides for a comparatively flexible provision for amendment and there is ' no reason to make it rigid by implying any limitations on that power.
Further there Is no reason to suppose that all those things will be done by Parliament which are being urged to deny the power under article 368 which flows naturally from its terms.
Besides the above, reliance is also placed on behalf of the Union of India and the States on the doctrine.
of stare decisis.
It is urged that since the decision of this Court in Sankari Prasad 's case(1), sixteen further amendments have been made by Parliament on the faith of that decision involving over 200 Articles of the Constitution.
The amendments relating to Part III have been mainly with respect to agrarian reforms resulting in transfers of title of millions of acres of land in favour of millions of people.
Therefore ', even though Sankari Prasad 's case(1) has stood only for fifteen years there has been a vast agrarian revolution effected on the faith of that decision and this Court should not now go back on what was decided in that case.
Further, besides the argument based on state decisis, it is urged on the basis of certain decisions of this Court that the unanimous decision in Sankari Prasad 's case(1) which had stood practically unchallenged for about '15 'years till the decision in Sajjan Singh 's case(2), should not be over ruled unless it is found to be incorrect by a large majority of the Judges constituting this Special Bench.
It is urged that if the present Bench is more or less evenly divided it should not over rule the unanimous decision in ' Sankari Prasad 's case(1) by a Majority of one.
(1) (1952] S.C.R. 89.
(2) ; 825 We shall first take Art, 368.
It is found in Part XX of the Constitution which is headed.
Amendment of the Constitution" and is the only Article in that Part.
That Part thus provides specifically for the amendment of the Constitution, and the first question that arises is whether it provides power for the amendment of the Constitution as well as the procedure for doing so.
It is not disputed that the procedure for amendment of the Constitution is to be found in article 368, but what is in dispute is whether article 368 confers power also in that behalf.
Now the procedure for the amendment of the Constitution is this: The amendment is initiated by the introduction of a Bill in either House of Parliament.
The Bill has to be passed in each House by a majority of the total membership of that House and by a Majority of not less two thirds of the members of that House present and voting.
After it is so passed, it has to be presented to the President for his assent.
On such presentation if the President assents to the Bill, article 3 68 provides that the Constitution shall stand amended in accordance with the terms of the Bill.
Further there is a proviso for ratification with respect to certain Articles and other provisions of the Constitution including article 368, and those matters can only be amended if the Bill passed by the two Houses by necessary majority is ratified by the legislatures of not less than one half of the States by resolutions to that effect.
In such a case the Bill cannot be presented for his assent to the President until necessary ratification is available.
But when the. necessary ratification has been made, the Bill with respect to these matters is then presented to the President and on his assent being given, the Constitution stands amended.
in accordance with the terms of the Bill.
The argument is that there is no express provision in terms in article 368 conferring power on Parliament to amend the Constitution, and in this connection our attention has been invited to an analogous provision in the Constitution of Ireland in article 46, where cl. 1 provides that any provision of the Constitution, may be amended in the manner provided in that Article, and then follows the procedure for amendment in clauses 2 to 5.
Reference is also made to similar provisions in.
other constitutions, but it is unnecessary to refer to them.
It is urged that as article 368 has nothing comparable to cl.
I of article 46 of the Irish Constitution, the power to amend the Constitution is not in.
article 3 68 and must .be.
found elsewhere.
We are not prepared to accept this argument.
The fact that article 368 is not in two parts, the first part indicating that the Constitution shall be amended in the manner provided thereafter, and the second part indicating the procedure for amendment, does not mean that the power to amend the Cons titution is not contained in article 368 itself.
The very fact that a 826 separate Part has been devoted in the Constitution for amendment thereof and there is only one Article in that Part shows that both the power to amend and the procedure for amendment are to be found in article 368.
Besides, the words "the Constitution shall stands amended in accordance 'with the terms of the Bill" in article 368 clearly in our opinion provide for the power to amend after the procedure has been followed.
It appears that our Constitution makers were apparently thinking of economy of words and elegance of language in enacting article 368 in the terms in which it appears and that is why it is not in two parts on the model of Art.46 of the Irish Constitution.
But there can in our opinion.
be not doubt, when a separate Part was provided headed "Amendment of the Constitution" that the power to amend the Constitution must also be contained in article 368 which is the only Article in that Part.
If there was any doubt about the matter, that doubt in our opinion is resolved by the words to which we have already referred namely "the Constitution shall stand amended in the terms of the Bill".
These words can only mean that the.
power is there to amend the Constitution after the procedure has been followed.
It is however urged that the power to amend the Constitution is not to be found in article 368 but is contained in the residuary power of Parliament in article 48 read with item 97 of List 1.
It is true that article 248 read with item 97 of List I, insofar as it provides for residuary power of legislation, is very wide in its scope and the argument that the, power to amend the Constitution is contained in this provision appears prima facie attractive 'in view of the width of the residuary power.
But we fail to see why when there is a whole Part devoted to the amendment of the Cons titution the power to amend should not be found in that Part, if it can be reasonably found there and why article 368 should only be confined to providing for procedure for amendment.
It is true that the marginal note to article 368 is "procedure for amendment of the Constitution", but.
the marginal note cannot control the meaning of the words in the Article itself, and we have no doubt that the words "the Constitution shall stand amended in accord the power of amendment.
If we were to compare the language of cls.
2 to 5of article 46 of the Irish Constitution which prescribes the procedure for amendment, we find no words therein comparable to these words in article 368.
These words clearly are com parable to cl.
I of article 46 of the Irish Constitution and must be rod as conferring power on Parliament to amend the Constitution.
Besides it is remarkable in contrast that article 248 read with List I does not in terms mention the amendment of the Constitution.
while therefore there is a whole Part devoted to the amendment of the Constitution, we do not find any specific mention of the 827 amendment of the Constitution in article 248 or in any entry of List 1.
It would in the circumstances be more appropriate to read in power in article 3 68 in view of the, words which we have already referred to than in article 248 read with item 97 of List I.
Besides it is a historical fact to which we can refer that originally the intention was to vest residuary power in States, and if that intention had been eventually carried out, it would have been impossible for any one to argue that the power to amend the Constitution was to be found in the residuary power if it had been vested in the States and not in the Union.
The mere fact that during the passage of the Constitution by the Constituent Assembly, residuary power was finally vested in the Union would not therefore mean that it includes the power to amend the Cons titution.
On a comparison of the scheme, of the words in Art 368 and the scheme of the words in article 248 read with item 97 of List 1, therefore, there is no doubt in our mind that both the procedure and power to amend the Constitution are to be found in article 368 and they are not to be found in article 248 read with item 97 of List I which provides for residuary legislative power of Parliament.
There is in our opinion another reason why the power to amend the Constitution cannot found in article 248 read with item 97 of List 1.
The Constitution is the fundamental law and no law passed under mere legislative power conferred by the Constitution can affect any change, in the Constitution unless there is an express power to that effect given in the Constitution itself.
But subject to such express power given by the Constitution itself, the fundamental law, namely the Constitution, cannot be changed by a law passed under the legislative provisions contained in the Constitution as all legislative acts passed under the power conferred by the Constitution must conform to the Constitution can make no change therein.
There are a number of Articles in the Constitution, which expressly provide for amendment by law, as,.
for example, 3, 4, 10, 59(3), 65(3), 73(2), 97, 98(3), 106, 120(2), 135, 137, 142(1), 146(2), 148(3), 149, 169, 171(2), 196, 187(3), 189(3), 194(3), 195, 210(2), 221(2).
225, 229(2), 239(1), 241(3), 283(1) and (2), 285(2), 287, 306(1), 313, 345, 373, Sch.
V. cl. 7 and Sch.
VI, cl. 21,, and so far as these Articles are concerned they can be amended by Parliament by.
ordinary law making process.
But so far as the other Articles are concerned they can only be amended by amendment of 'the Constitution under article 368.
Now article 245 which gives power to make law for the whole or any part of the territory of India by Parliament is "subject to the provisions of this Consti tution" and any law made by Parliament whether under article 246 read with List I or under article 248 read with item 97 of List I be subject to the provisions of the Constitution.
If therefore the power to amend the Constitution is contained in article 248 828 read with item 97 of List 1, that power has to be exercised subject to the provisions of the Constitution and cannot be used to change the fundamental law (namely, the Constitution) itself.
But it is argued that article 368 which provides a special procedure for amendment of the Constitution should be read along with articles 245 248, and so read it would be open to amend any provision of the Constitution by law passed under article 248 on the ground that article 248 is subject to article 368 and therefore the two together give power to Parliament to pass a law under article 248 which will amend even those provisions of the Constitution which are not expressly made amendable by law passed under the legislative power of Parliament.
This in our opinion is arguing in a circle.
If the fundamental law (ie.
the Constitution) cannot be I changed by any law passed under the legislative powers contained therein, for legislation so passed must conform to the fundamental law, we fail to see how a law, passed under the residuary power which is nothing, more than legislative power conferred on parliament under the Constitution, can change the Constitution (namely, the fundamental law) Itself.
We,may in this connection refer to the following passage in The Law.and the Constitution by W. Ivor Jennings (1933 Ed.) at p. 51 onwards : "A written constitution is thus the fundamental law of a country, the express embodiment of the doctrine of the region of law.
All public uthorities legislative, administrative and judical take their powers directly or indirectly from it. .Whatever the nature of the written constitution it is clear that there "is a fundamental distinction between constitutional law and the rest of the law. .
There is a clear separation, therefore, between the constitutional law and the rest of the law.
" It is because of this difference between the.
fundamental law (namely, the Constitution) and the law passed under the legislative provisions of the Constitution that it is not possible in the absence of an express provision to that effect in the fundamental law to ,change the fundamental law by ordinary legislation passed thereunder, for such ordinary legislation must always conform to the fundamental law (i.e. the Constitution).
If the power to amend the Constitution is to be found in article 248 read with item 97 of List 1.
It will mean that ordinary legislation passed under fundamental law would amend that law and this cannot be done unless there is express provision as in article 3 etc.
to that effect In the absence of such express provisions any law passed under the legislative powers granted under the fundamental ' law cannot amend it.
So if we were to hold that the power to amend the 829 Constitution is comprised in article
248, that would mean that no amendment ,of the Constitution would be possible at all except to the extent expressly provided in various Articles to which we have referred already, for the power to legislate under article 245 read with article 248 is itself subject to the Constitution.
Therefore reading article 368 and considering the scheme of the legislative powers conferred by Articles 245 and 248 read with item 97 of List I" this to our mind is clear, firstly that the power to amend the, Constitution is to be found in article 368 itself, and secondly, that the power to amend the Constitution can never reside in article 245 and article 248 read with item 97 of List 1, for that would make any amendment of the Constitution impossible except with respect to the express provisions contained in certain Articles thereof for amendment by law .
We may in this connection add that all this argument that power to amend the Constitution is to be found in article 245 and article 248 read with item 97 of List I has been based on one accidental circumstance, and that accidental circumstance is that the procedure for amendment of the Constitution contained in article 368 is more or less assimilated to the procedure for making ordinary laws under the Constitution.
The argument is that constitutional amendment is also passed by the two Houses of Parliament, and is assented to by the President like ordinary legislation, with this difference that a special majority is required for certain purposes and a special majority plus ratification is required for certain other purposes.
It may be admitted that the procedure for amendment under article 368 is somewhat similar to the procedure for passing ordinary legislation under the Constitution.
Even so, as pointed out by Sir Ivor Jennings in the passage already quoted, there is a clear separation between constitutional law and the rest of the law and that must never be forgotten.
An amendment to the Constitution is a constitutional law and as observed in Sankari Prasad 's case(1) is in exercise of constituent power; passing of ordinary law is in exercise of ordinary legislative power and is clearly different from the power to amend the Constitution.
We may in this connection refer, for example, to article V of other U.S. Constitution, which provides for the, amendment thereof.
It will be clearly seen that the power contained in article V of the U.S. Constitution is not ordinary legislative power and no one can possibly call it ordinary legislative power, because the procedure provided for the amendment of the Constitution in article V differs radically from the procedure provided for ordinary legislation, for example, the President 's assent is not required constitutional amendment under article V of the U.S. Constitution,; Now if article 368 also had made a similar departure from the procedure provided for ordinary legislation, it could never have (1) [1952 ] 1 section C. R. 89 830 said that article 368 merely contained the procedure for amendment and that what emerges after that procedure is followed is ordinary law of the same quality and nature as emerges after following the procedure for passing ordinary law.
If, for example, the assent of the President which is to be found in article 368 had not been there and the Constitution would have stood amended after the Bill had been passed by the two Houses by necessary majority and after ratification by not less than one half of the States where so required , it could never have been argued that the power to amend the Constitution was contained in article 245 and 248 read with item 97 of List I and article 368 merely con tained the procedure.
We are however of opinion that we should look at the quality and nature of what is done under article 368 and not lay so much stress on the similarity of the procedure contained in article 368 with the procedure for ordinary lawmaking.
If we thus look at the quality and nature of what is done under article 368, we find that it is the exercise of constituent power for the purpose of amending the Constitution itself land is very different from the exercise of ordinary legislative power for passing laws which must be in conformity with the Constitution and cannot go against any provision thereof, unless there is express provision to that effect to which we have already referred.
If we thus refer to the nature and quality of what is done under article 368, we immediately See that what emerges after the procedure in article 368 is gone through is not ordinary law which emerges after the legislative procedure contained in the Constitution is gone through.
Thus article 368 provides for the coming into existence of what may be called the fundamental law in the form of an amendment of the Constitution and therefore what emerges after the procedure under article 368 is gone through is not ordinary legislation but an amendment of the Constitution which becoming a part of the fundamental law itself, by virtue of the words contained in article 368 to the effect that the Constitution shall stand amended in accordance with the terms of the 'Bill.
It is urged in this connection on behalf of the Union of India that even though the assent of the President is required under Aft. 368, the ;President must assent thereto and cannot withhold his assent as is possible in the case of ordinary law in view of article III of the Constitution, for the words "that he withholds assent therefrom" found in article III are not to be found in article 368.
It is however difficult to accept the argument on behalf of the Union that the President cannot withhold his assent when a Bill for amendment of the Constitution is presented to him.
Article '368 provides that a Bill for the amendment of the, Constitution shall be presented to the President for his assent.
It further provides 831 that upon such assent by the President, the Constitution shall, stand amended.
That in our opinion postulates that if assent is not given, the Constitution cannot be amended.
Whether a President will ever withhold his assent in our form of Government is a different matter altogether, but as we road article 368 we cannot.
hold that the President is bound to assent and cannot withhold his assent when a Bill for amendment of the Constitution is presented to him.
We are of opinion that 'the President can refuse to give his assent when a Bill for amendment of the Constitution is presented to him, the result being that the Bill altogether falls, for there is no specific provision for anything further to be done,: about the Bill in article 368 as there is in article III.
We may in this.
connection refer to the different language used in cl. 5 of article 46 of the Irish Constitution which says that "a Bill containing a proposal for the amendment of this Constitution shall be signed by the President Forthwith upon his being satisfied that the provisions of this Article have been complied with, in respect thereof '.
It will be seen therefore that if the intention kinder article 368 had been that the President cannot withhold his assent, we would have found language similar in terms to that in cl. 5 of article 46 of the Irish Constitution.
We thus see that in one respect at any rate article 368 even on its present terms differs from the power of the President in connection with ordinary legislation under the Constitution and that is if the President withholds his assent the Bill for amendment of ' the Constitution immediately falls.
We cannot accept that the procedure provided under the proviso to article 111 can apply in such a case, for this much cannot be disputed that so far as the procedure for amendment of the Constitution is concerned we must look to article 368 only and nothing else.
In any case the mere fact that the procedure in article 368 is very much assimilated.
to the procedure for passing ordinary legislation is no reason for, holding that what emerges after the procedure under article 368 is followed is ordinary law and no more.
We repeat that we must look at the quality and nature of what is done under article 368, and that is, the amendment of the Constitution.
If we look at that we must bold that what emerges is not ordinary law passed under the Constitution but something which has the effect of amending the fundamental law itself which could not be done by ordinary legislative process under the Constitution unless there is express provision to that effect.
We have already referred to such express provisions in various Articles, but article 368 cannot be treated as such an Article, for it deals specifically with the amendment of the Constitution as a whole.
It is also remarkable to note in this connection that the, word "law" which has been used in so many Articles of 'the Consti 832 tution has been avoided apparently with great care in article 368.
We again refer to the concluding words 368 which says that the "Constitution shall stand amended in accordance with the terms of the Bill.
Now it is well known that in the case of ordinary legislation as soon both Houses and has received the assent of the main part of article stand amended in ac it is well known that as the Bill is passed by of the President it becomes an Act.
But article 368 provides that as soon as the Bill for amendment of the Constitution has been passed in accordance with the procedure provided there in the Constitution shall stand amendmend in accordance with the terms of the Bill.
These words in our opinion have significance of their own.
It is also remarkable that these words clearly show the difference between the, quality of what emerges after the procedure under article, 368 is followed and what happens when ordinary law making procedure is followed.
Under article III, in the case of ordinary law making when a Bill is passed by the two Houses of parliament it is presented to the President and the President shall declare either that he assents to the Bill or that he withholds assent therefrom.
But it is remarkable that article 111 does not provide that when the Bill has been assented to by the President it becomes an Act ' The reason for this is that the Bill assented to by the President though it may become law is still not declared by article I I I to be a law, for such law is open to challenge in courts on various ,grounds, namely, on the ground that it violates any fundamental rights, or on the ground that Parliament was not competent to pass it or on the ground that it is in breach of any provision of the Constitution.
On the other hand we find that when a Bill for the amendment of the Constitution is passed by requisite majority and assented to by the President, the Constitution itself ,declares that the Constitution shall stand amended in accordance with the terms of the Bill.
Thereafter what courts can see is whether the procedure provided in article 368 has been followed, for if that is not done, the Constitution cannot stand amended in accordance with the terms of the Bill.
But if the procedure has been followed, the Constitution stands amended, and there is no question of testing the amendment of the Constitution thereafter on the anvil of fundamental rights or in any other way as in the case of ordinary legislation.
In view of an this we have no doubt that even though.
by accident the procedure provided in the Constitution for amendment thereof is very akin to the procedure for passing ordinary legislation, the power contained in article 368 is still not ordinary legislative power but constituent power for the specific purpose of amendment of the Constitution; and it is the quality of that power which determines the nature of what emerges after the procedure in article 368 has been followed and what thus emerges is not ordinary legislation but fundamental law which cannot be tested,.
for example, under article 13(2) of the Constitution or under any other provision of the Constitution.
833 We may briefly refer to an argument on behalf of the Union of India that the amending power contained in article 368 is same sovereign power which was possessed by the Constituent Assembly when it made the Constitution and therefore it is not subject to any fetters of any kind.
We do not think it necessary to enter into the academic question as to where sovereignty re sides and whether legal sovereignty is in the people and political.
sovereignty in the body which has the power to amend the Constitution and vice versa.
In our view the words of article 368 clearly confer the power to amend the Constitution and also provide the procedure for doing so, and that in our opinion is enough for the purpose of deciding whether the Seventeenth Amendment is valid or not.
Further as we have already stated, the power conferred under article 368 is constituent power to change the fundamental law i.e. the Constitution, and is distinct and different from the ordinary legislative power conferred on Parliament by various other provisions in the Constitution.
So long as this distinction is kept in mind Parliament would have the power under article 368 to amend the Constitution and what Parliament does under article 368 is not ordinary law making which is subject to article 13 (2) or any other Article of the Constitution.
What is the extent of the power conferred on Parliament and whether there are any limitations on it express or implied will be considered by us presently.
But we have no doubt, without entering into the question of sovereignty and of whether article 368 confers the same sovereign power on Parliament as the Constituent Assembly had when framing the Constitution, that article 368 does confer power on Parliament subject to the procedure provided therein for amendment of any provision of the Constitution.
This brings us to the scope and extent of the power conferred, for amendment under article 368.
It is urged that article 368 only gives power to amend the Constitution.
Recourse is had on behalf of the petitioners to the dictionary meaning of the word, "amendment".
It is said that amendment implies and means improvement in detail and cannot take in any change in the basic features of the Constitution.
Reference in this connection may be made to the following meaning of the word " 'amend" in the Oxford English Dictionary, namely, "to make professed improvements in a, measure before Parliament; formally, to after in detail, though practically it may be to alter its principle, so as to thwart ".
This meaning lit any rate does not support the case of the petitioners that amendment merely means such change as results in improvement in detail.
It shows that in law though amendment MAY professedly, be intended to make improvements and to alter only in detail, in reality, it may make a radical change in the provision which is amended.
In any case, as was pointed out in Sajjan Singh 's case(1) the word "amend" or "amendment" ' is well under (1) ; 834 stood in law and will certainly include any change whether by way of addition or alteration or deletion of any provision in the Constitution.
This is no reason to suppose that when the word.
"amendment" of the Constitution was being used in article 368, the intention was to give any meaning less than what we have stated above.
To say that "amendment" in law only means a change 'which results in improvement would make amendments impossible, for what is improvement of an existing law is a matter of opinion and what, for example, the legislature may consider an improvement may not be so considered by others.
It is therefore in our opinion impossible to introduce in the concept of amendment as used in article 368 any idea of improvement as to details of the Constitution.
The word "amendment" used in article 368 must therefore be given its full meaning as used in law and that .means that by amendment an existing Constitution or law can be changed and this change can take the form either of addition to the existing provisions, or alteration of existing provisions and their substitution by others or deletion of certain provisions.
altogether.
In this connection reference has been made to contrast certain other provisions of the Constitution, where, for example the word "amend" has been followed by such words as "by way of addition, variance or repeal" (see Sixth Schedule, paragraph 2 1) and more or less similar expressions in other Articles,of the Constitution.
it is very difficult to say fact, that no such words appear in article make any difference, for the meaning of the word why this was done.
But the 368 does not in our, mind "amendmend" in law is clearly as indicated above by us and the presence or sense, of explanatory words of the nature indicated above do not in our opinion make any difference.
The question whether the power of amendment given by article 368 also 'includes the power to abrogate the Constitution completely and to replace it by an entire new Constitution, does not really arise in the present case, for the Seventeenth Amendment has not done any such thing and need not be considered.
It is enough to say that it may be open to doubt whether the power of amendment contained in article 568 goes to the extent of completely abrogating the present Constitution and substituting it by an entirely new one.
But short of that, we are of opinion that the power to amend includes the power to add any provision to the Constitution.
to alter any provision and substitute any other provision in its place and to delete any provision.
The Seventeenth Amendment is merely in exercise of the power of amendment a indicated above and cannot be struck down on the ground that it goes beyond the power conferred on Parliament to amend the Constitution by article 368.
The next question that arises is whether there is any limi tation on the power of amendment as explained by us above.
835 Limitations may be of two kinds, namely, express or implied.
So far as express limitations are concerned, there are none such in ' article 368.
When it speaks of the "amendment of this Constitution it obviously and clearly refers to amendment of any provision thereof, including the provisions contained in Part III relating to fundamental rights.
Whether article 13(2) is an express limitation on the power of amendment will be considered by us law, but so far as, article 368 is concerned there are no limitation whatsoever in the matter of substance on the amending power and any provision of the Constitution, be it in Part III and any other Part, can be amended under article 368.
The next question is whether there are any implied limita tions on the power of amendment contained in article 368, and this Wags us to the argument that there are certain basic features of the Constitution which cannot be amended at all and there is an implied limitation on the power of amendment contained in article 5 68 so far as these basic features are concerned.
We may in this connection refer to the view prevailing amongst jurists in the United States of America as to whether there are any plied limitations on the power of amendment contained in article V of the U.S. Constitution.
There are two lines of thought in this matter in the United States.
Some jurists take the, view that there are certain implied limitations on the power to amend contained in article V of the U.S. Constitution.
These are said to be with respect to certain basic features, like, the republican character of Government, the federal structure etc.
On the other hand, it is that the more prevalent view amongst jurists in the United States is that there are no implied limitations on the scope of the amending power in article V of the U.S. Constitution.
Willis on the Constitutional Law of the United States of America (1936 Edition says that probably the correct position is that the amending power embraces everything; in other words there are no legal limitations whatever on the power of amendment, except what is expressly provided, in article V : (see discussion on pp. 1.22 to 127).
Even with respect to these express limitations, Munro in The Government of the United States (Fifth Edition) at p. 77 says that even these express limitations can be removed and one of the ways of doing so is "to remove, the exception by a preliminary amendment and thus clear the way for further action".
Besides, as a matter of fact there is no decision of the Supreme Court of the United States holding that there are implied limitations on the power of amendment contained in article V of the U.S. Constitution and all amendments so far made in the United States have been upheld by the Supreme Court there in the few cases that have been taken to it for testing the validity of the amendments.
836 We have given careful consideration to the argument that certain basic features of our Constitution cannot be amended under article 368 and have come to, the conclusion that no limitations can be and should be implied upon the power of amendment under article 368.
reason for coming to this conclusion is that if we were to accept that certain basic features of the Constitution cannot be amended under article 368, it will lead to the position that any amendment made to any Article of the Constitution would be liable to challenge before courts on the ground that it amounts to amendment of a basic feature.
Parliament would thus never be able to know what amendments it can make in the Constitution and what it cannot; for, till a complete catalogue of basic features of the Constitution is available, it would be impossible to make any amendment under article 368 with any certainty that it would be upheld by courts.
If such an implied limitation were to be put on the power of amendment contained in article 368, it would only be the courts which would have the power to decide what are basic features of the Constitution and then to declare whether a particular amendment is valid or not on the ground that it amends a particular basic feature or not.
The .result would be that every amendment made in the Constitution would provide a harvest of legal wrangles so much so that Parliament may never know what provisions can be amended and what cannot.
The power to amend being a constituent power cannot in our opinion for these reasons be held subject to any implied limitations thereon on the ground that certain basic features of the Constitution cannot be amended.
We fail to see why if there was any intention to make any part of the Constitution unamendable, the Constituent Assembly failed to indicate it expressly in article 368.
If, for example, the Constitution makers intended certain provisions in the Constitution, and Part III in particular, to be not amendable, we can see no reason why it was not so stated in article 368.
On the clear words of article 368 which provides for amendment of the Constitution which means any provision thereof,.
we cannot infer an implied limitation on the power of amendment of any provision of the Constitution ', be it basic or otherwise.
Our conclusion is that constituent power, like that contained,in article 368, can only be subject to express limitations and not to any implied limitations so,far as substance of the amendments are concerned and in the absence of anything in article 368 making any provision of the Constitution unamendable, it Must be held that the power to.
amend in article .3 68 reaches every provision of the Constitution and can be used to amend any provision thereof provided the procedure indicated, in article 368 is followed.
Copious references were made during the course of arguments to debates in Parliament and it is urged that it is open to this 837 Court to look into the debates in order to interpret article 368 to find out the intention of the Constitution makers.
We are of opinion that we cannot and should not look into the debates that took place in the Constituent Assembly to determine the interpretation of article 368 and the scope and extent of the provision contained therein.
It may be conceded that historical background and perhaps what was accepted or what was rejected by the Constituent Assembly while the Constitution was being framed, may be taken into account in finding out the scope and extent of article 368.
But we have no doubt that what was spoken in the debates in the Constituent Assembly cannot and should not be looked into in order to interpret article 368.
Craies on Statute Law (Sixth Edition) at p. 128 says that "it is not permissible in discussing the meaning of an obscure enactment, to refer to 'parliamentary history ' of a statute, in the sense of the debates which took place in Parliament when the statute was under consideration", and supports his view with reference to a large number of English cases.
The same is the view in Maxwell on Interpretation of Statutes, (11th Edition) p. 26.
Crawford on Statutory Construction (1940 Edition) at p. 340 says that resort may not be had to debates to ascertain legislative Intent though historical background in which the legislation came to be passed, can be taken into consideration .
In Administrator General of Bengal vs Prem Lai Mullick(1), the Privy Council held that "proceedings of the legislature cannot be referred to as legitimate aids to the construction of the Act in which they result.
" In Baxter vs Commissioner of Taxation(2), it was said that reference to historical facts can be made in order to interpret a statute.
There was however no reference to the debates in order to arrive at the meaning of a particular provision of the Constitution there in dispute.
In A. K. Gopalan vs the State of Madras(3), Kania C.J. re ferring to the debates and reports of the Drafting Committee of the Constituent Assembly in respect of the words of article 21 observed at p. I 10 that they might not be read to control the meaning of the Article.
In that case all that was accepted was that "due process of law" which was a term used in the.
U.S. Constitution, was not accepted for the purpose of article 21 which used the words 44 the procedure established by law".
Patanjali Sastri J. (at p. 202) also refused to look at the debates 'and particularly the speeches made in order to determine the meaning of article 21.
Fazl Ali, J. (at p. 158) was of opinion that the pro (1) (2) ; (3) ; Sup.
CI/67 8 838 ceedings and discuss ions In Constituent Assembly were not relevant for the purpose of construing the expressions used in article 2 1.
Again in The Automobile Transport (Rajasthan) Limited vs the State of Rajasthan(. '), this Court looked into the historical background but refused to look into the debates in order to determine the meaning of the provisions of the Constitution in dispute in that case.
We are therefore of opinion that it is not possible to read the speeches made in the Constituent Assembly in order to interpret An. 368 or to define its extent and scope and to determine what it,takes in and what it does not.
As to this historical facts. namely, what was accepted or what was avoided in the Constituent Assembly in connection with article 368, it is enough to say that we have not been able to find any help from the material relating to this.
There were proposals for restricting the power of amendment under article 368 and making fundamental rights immune from and there were counter proposals before the Constituent assembly for making the power, of amendment all embracing They were all either dropped or negatived and in the circumstanses are of no help in determining the interpretation of article 368 which must be interpreted on the words thereof as they finally found place in the Constitution, and on those words we have no doubt that there are no implied limitations of any kind on the power to amend given therein.
An argument is also raised that limitations on the power to amend the Constitution can be found in the preamble to the Constitution.
As to that we may refer only to in re: the Berubari Union and Exchange of Enclaves(2) with respect to the value of the preamble to the Constitution and its importance therein.
It was observed in that case unanimously by a Bench of nine judges that "although it may be correct to describe the preamble as a key to the mind of the Constitution makers, it form no part of the Constitution and cannot be regarded as the source of any substantive power which the body of the Constitution alone can confer on the Government , expressly or by implication.
This is equally true to prohibitions and limitations".
The Court there was considering whether the preamble could in any way limit the power of Parliament to cede any part of the national teritory and held that it was not correct to say that "the preamble in any way limit the power of Parliament to cede parts of the national territory".
On a parity, of reasoning we are of opinion that the preamble cannot prohibit or control in any way or impose any implied prohibitions or limitations oft Me power to amend the Constitution contained in article 368.
(1) [1963] 1 S.C.R. 491.
(2) 839 This brings us to the question whether the word "law" in article 13 (2) includes an amendment of the Constitution, and therefore there is an express provision in article 1 3 (2) which at least limits the power of amendment under article 3 68 to this extent that by such amendment fundamental rights guaranteed by Part 111 cannot be taken away or abridged.
We have already pointed out that in Sankari Prasad 's case(1) as well as Sajjan Singh 's case(1) it has already been held, in one case unanimously and in the other by majority, that the word "law" in article 13(2) does not include an amendment of the Constitution, and it is the correctness of this view which is being imputed before this Bench, Article 13 is in three parts.
The first part lays down that "all laws in force in the territory of India immediately before the commencement of this Constitution, insofar as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void".
Further all previous constitutional,provisions were repealed by article 395 which provided that " 'the Indian Independence Act, 1947, and the Government of India Act, 1935, together with all enactments amending or supplementing the latter Act, but not including the Abolition of Privy Council Jurisdiction Act, 1949, are hereby repealed." ' Thus it is clear that the word "law" in article 13(1) does not include any law in the nature of a constitutional provision, for no such law remained after the repeal 'in article 395.
Then comes the second part of article 13, which says that State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void".
The third part defines the word "law" for the purpose of article 13; the definition is inclusive and not exhaustive.
It is because of the definition in cl.
(3 ) of article 13 being inclusive that it is urged that the word "law" in article 13 (2) includes an amendment of the Constitution also.
Now we see no reason why if the word "law" in article 13(1) relating to past laws does not include any constitutional provision the word "law" in cl.
(2) would take in an amendment of the Constitution, for it would be reasonable to the word "law" 'in article 13(2) includes an amendment of the 13.
But apart from this consideration, we are of opinion that the word "law" in Art 13(2) could never have been intended to take in an amendment of the Constitution.
What article 13(2) means is that a law made under the constitutional provisions would, be tested on the anvil of Part III and if it takes away or abridges rights conferred by Part III it would be void to the extent of the contraventions.
There are many Articles in the Con stitution, which directly for making law in addition to Articles 245, 246, 248, etc.
and the three Lists and Aft.
13(2) (1) ; (2) ; 840 prohibits the State from making any law under these provisions.
We see no difficulty in the circumstances in holding that article 13 (2) when it talks of the State making any law, refers to the law made under the provisions contained in Ch.
I of Part XI of the Constitution beginning with article 245 and also other provisions already referred to earlier.
Article 246 provides that Parliament may make laws for the whole or any part of the territory of India and the legislature of a State may make laws for the whole or any part of the State.
Article 246(1) gives exclusive power to Parliament to make laws with respect to subjects enumerated in List 1.
Article 246(3) gives exclusive power to State legislatures to make laws with respect to List II.
Article 248(1) gives exclusive power to Parliament to make laws with respect to any matter not enumerated in the Concurrent List or the State List.
We are referring to these provisions merely to show that the various provisions in Chapter I of Part XI provide for making laws,and these laws are all laws which are made under the legislative power conferred on Parliament or on State legislatures under the Constitution.
Therefore when in article 13( ) it is said that the State shall not make any law (State there including Parliament and legislature of each State), its meaning could only take in laws made by Parliament and State legislatures under the powers conferred under Chapter I of Part XI.
and also other provisions already referred to earlier.
We have already held that the power to amend the Constitution is to be found in article 368 along with the procedure and that such power is not to be found in article 248 read item 97 of List I. Therefore an amendment of the Constitution is not an ordinary law made under the powers conferred under Chapter I of Part XI of the Constitution and cannot be subject to article 13(2) where the word "law" must be read as meaning law made under the ordinary legislative power.
We have already referred to a large number of Articles where Parliament is given the power to make law with respect to those Articles.
So far as this power of Parliament is concerned it is ordi nary legislative power and it will certainly be subject to article 13 (2).
But there can in our opinion be no doubt that when article 13(2) prohibits the State from making any law which takes away or abridges rights conferred by Part III, it is only referring to ordinary legislative power conferred on Parliament and legislatures of States and cannot halve any reference to the constituent power for amendment of the Constitution contained in article 368.
We have already pointed out that there are no implied limitative on the power to amend under article 368 and it is open to Parliament under that Article to amend any part of the Constitution, including Part M.
It is worth remembering that a whole Part XX is devoted by the Constitution makers to the subject of 841 amendment of the Constitution.
If it was their intention that Part III of the Constitution will not be liable to amendment by way of abridgement or abrogation under the amending power contained in article 368 we see no reason why an express provision to that effect was not made in article 368.
We cannot see what prevented the Constituent Assembly from making that clear by an express provision in article 368.
It is however said that it was not necessary to say so in article 368, because the provision was already made in article 13(2).
We are unable to accept this contention, for we have no doubt that article 13(2), when it refers to making of laws is only referring to the ordinary legislative power and not to the constituent power which results in amendment of the Con stitution.
In any case it seems to us somewhat contradictory that in article 368 power should have been given to amend any provision of the Constitution without any limitations but indirectly that power is limited by using words of doubtful import in article 13(2).
It is remarkable that in article 13(2) there is no express provision that amendment of the Constitution, under article 368, would be subject thereto.
It seems strange indeed that no express provision was made in Part XX in this matter and even in article 13(2) no express provision is made to this effect, and in both places the matter is left in a state of uncertainty.
It is also remarkable that in article 368 the word "law", which we find so often used in so many Articles of the Constitution is conspicuously avoided, and it is specifically provided that after the procedure has been gone through the Constitution shall stand amended in accordance with the terms of the Bill.
This language of article 368 is very significant and clearly makes a distinction between a constitutional Amendment and an ordinary law passed as an Amending Act.
The validity of a law has to be determined at the time when the Bill actually matures into an Act and not at the stage while it is still a Bill.
The provision in article 368 has the effect that when a Bill amending the Constitution receives the assent of the President, the Constitution stands amended in accordance with the terms of the Bill.
The Constitution thus stands amended in terms of the Bill if the Bill has been introduced, passed and assented to by the President in accordance with the procedure laid down in article 368 and not as a result of the Bill becoming an Amendment Act introducing amendment in the Constitution.
The provision that the Constitution shall stand amended in terms of the Bill was thus clearly intended to indicate that the amendment of the Constitution is not dependent on the Bill being treated as a law or an Act duly passed by Parliament.
Thus it is clear that by indicating that the Constitution is to stand amended in accordance with the terms of the Bill, article 368 clearly envisages that the power of amendment of the Constitution stands on an entirely different footing from an ordinary law made by Parliament in exercise of its legislative power.
842 If We keep in mind this difference, between constitutional amendment or constitutional law and an ordinary amending Act or law, it should not be difficult to hold that when Art 13 (2), speaks of the St ate making a law, it is referring to ordinary law made under the powers conferred by article 245 etc read with various Lists and various provisions of the Constitution where express provision to that effect has been made and is not referring to the amendment of the Constitution which is made under the 'constituent power.
Once it is held that the power to amend is found in article 368 and is not to be found in article 248 read with item 97 of List I, it must follow that the power to amend the Constitution under article 368 is a different power (namely, constituent power) and when article 13 (2) speaks of making 'law, it can only refer to making ordinary law, particularly when we compare the words of article 13 (2) (namely, the State shall not make any law) and the words of articles 245, 248, and 250 (which all speak of Parliament making law, State legislatures making law, and so on).
Lastly, as the power to amend is in article 368 and on the words, as they stand in that Article, that power is unfettered and includes the power to amend Part III, it is strange that that power should be limited by putting an interpretation on the word "law" in article 13(2), which would include constitutional law also.
There is nothing to suggest this even in the inclusive definition of the words "law" and "laws in force" in article 13(3).
Besides, it is conceded on behalf of the petitioners that article 368 gives power to amend Part 111, but that power is only to amend one way, namely, towards enlargement of the rights contained therein, and not the other way, namely, for, abridging or taking away the rights contained therein.
W. , must say that it would require a very clear provision in the Constitution to read the power to amend the Constitution relating to Part III in this manner.
We cannot find that clear provision in article 1 3 (2).
We repeat that when the Constituent Assembly was taking the trouble of providing a whole Part for amendment of the Constitution and when the words in article 368 clearly give the power to amend the Constitution and are subject to no implied limitations and contain no express limitations, it is strange indeed that it should have omitted to provide in that very Article that Part III is not liable to amendment thereunder.
In any case if the power of amendment conferred by the words of article 368 is unfettered, we must avoid any inconsistency between that power and the provision contained in article 13 (2).
We avoid that in keeping with the unfettered power in article 368 by reading the word "law" in article 13 (2) as meaning law passed under: ordinary legislative power and thus not including an amendment of the Constitution therein.
The words in article
II (2) are in our opinion not specific and clear ' enough to take in 843 the power of amendment under article 368 and must be confined only to the power of ordinary law making contained in articles 245 etc., and other provisions of the Constitution read with various Lists.
We have therefore no hesitation in agreeing with the view taken in Sankari Prasad 's case(1) which was upheld by the majority in Sajjan Singh 's case(2).
The next argument is that action under the proviso to article 368 is necessary as the Seventeenth Amendment affects the power of the High Court contained in article 226.
It is said that by including various Acts in the Ninth Schedule and making them immune from challenge under the provisions contained in Part III, the power of the High Court under article 226 is affected inasmuch as the High Court cannot strike down any of the Acts included in the Ninth Schedule on the ground that they take away or abridge the rights conferred by Part III.
So it is said that there has been a change in article 226 and it was necessary that the Seventeenth Amendment should have been ratified by more than half the States under the proviso.
A similar argument was raised in Sankari Prasad 's case(1) and was turned down unanimously.
The same argument was again raised in Sajjan Singh 's case(2) and was also turned down.
Now ratification is required under the proviso if the amendment seeks to make any change in various provisions mentioned therein and one such provision is article 226.
The question therefore is whether the Seventeenth Amendment makes any change in article 226 and whether this change has to be a direct change in the words of article 226 or whether merely because there may be some effect by the Seventeenth Amendment on the, content of the power in article 226 it will amount to change in article 226.
We are of opinion that when the proviso lays down that there must be ratification when there is any change in the entrenched provisions, including article 226, it means that there must be actual change in the terms of the provision concerned.
If there is no actual change directly in the entrenched provision, no ratification is required, even if any amendment of any other provision of the Constitution may have some effect indirectly on the entrenched provisions mentioned in the proviso.
But it is urged that there may be such a change in some other provision as would seriously affect an entrenched provision, and in such a case ratification should be necessary.
This argument was also dealt with 'in the majority judgment in Sajjan Singh 's case(2) where the doctrine of pith and substance was applied and it was held that where the amendment in any other Article so affects the entrenched Article as to amount to an amendment therein, then ratification may be necessary, even though the entrenched Article may not be directly touched.
Perhaps the use of the doctrine of pith and substance (1) ; (2) [1965] 1 S.C.P. 933.
844 in such a case is not quite apt.
But what was meant in Sajjan Singh 's case(1) was that if there is such an amendment of an unentrenched Article that it will directly affect an entrenched Article and necessitate a change therein, then recourse must be had to ratification under the proviso.
We may illustrate this by two examples.
Article 226 lays down inter alia that the High Court shall have power to issue writs for the enforcement of any of the rights conferred by Part III and for any other purpose.
Now assume that Part III is completely deleted by amendment of the Constitution.
If that takes place, it will necessitate an amendment of article 226 also and deletion therefrom of the words "for the enforcement of any of the rights conferred by Part III".
We have no doubt that if such a contingency ever happens and Part III is completely deleted, Parliament will amend article 226 also and that will necessitate ratification under the proviso.
But suppose Parliament merely deletes Part III and does not make the necessary consequential amendment in article 226, it can then be said that deletion of Part III necessitates change in article 226 also, and therefore in such a case ratification is necessary, even though Parliament may not have in fact provided for amendment of Art 226.
Take another example.
Article 54 is an entrenched Article and provides for the election of the President.
So is article 55 which provides for the manner of election.
Article 52 which lays down that there shall be a President is on the other hand not an entrenched Article.
It is said that article 52 may be altered and something else may be substituted in its place and that would not require ratification in terms as article 52 is not among the entrenched Articles.
But we are of opinion that if Parliament amends article 52, it is bound to make consequential amendments in articles 54 and 55 which deal with the election of the President and the manner thereof and if it is so the entire amendment must be submitted for ratification.
But suppose Parliament merely amends article 52 and makes no change in articles 54 and 55 (a supposition which is impossible to visualise).
In that case it would in our opinion be right to hold that article 52 could not be altered by abolition of the office of the President without necessi tating a change in articles 54 and 55 and in such a case if article 52 alone is altered by Parliament, to abolish the office of President, it will require ratification.
These two examples will show where alteration or deletion of an unentrenched Article would necessitate amendment of an entrenched Article, and in such a case if Parliament takes the incredible course of amending only the unentrenched Article and not amending the entrenched Article, courts can say that ratifi (1) ; 845 cation is necessary even for amending the unentrenched Article, for it directly necessitates, a change in an entrenched Article.
But short of that we are of opinion that merely because there is some effect indirectly on an entrenched Article by amendment of an unentrenched Article it is not necessary that there should be ratification in such circumstances also.
Besides, let us consider what would happen if the argument on behalf of the petitioners is accepted that ratification is necessary whenever there is even indirect effect on an entrenched Article by amending an unentrenched Article.
Take the case of article 226 itself.
It gives power to the High Court not only to issue writs for the enforcement of fundamental rights but to issue them for any other purpose.
Writs have thus been issued by High Courts for enforcing other rights conferred by ordinary laws as well as under other provisions of the Constitution, like articles 301 and 311.
On this argument if any change is made in articles 301 and 311 there is bound to be an effect on article 216 and therefore ratification would be necessary, even though both articles 301 and 311 are not entrenched in the proviso.
Further, take an ordinary law which confers certain rights and it is amended and those rights are taken away.
Article 226 would be clearly affected.
Before the amendment those rights may be enforced through article 226 while after the amendment the rights having disappeared there can be no enforcement thereof.
Therefore, on this argument even if there is amendment of ordinary law there would be an effect on article 226 and it must therefore be amended every time even when ordinary law is changed and the entire procedure under article 368 must be gone through including ratification under the proviso.
It is however said that when ordinary law is amended, rights disappear and therefore there is no question of enforcement thereof; if that is correct with respect to ordinary law, it is in our opinion equally correct with respect to the amendment of an unentrenched provision of the Constitution.
The answer given in Sankari Prasad 's case(1) to this argument was that article 226 remained just the same as it was before, and only a certain class of cases had been excluded from the purview of Part III and the courts could no longer interfere, not because their powers were curtailed in any manner or to any extent, but because there would be no occasion thereafter for the exercise of their power in such cases.
We respectfully agree with these observations and are of opinion that merely because there is some indirect effect on article 226 it was not necessary that the Seventeenth Amendment should have been ratified by more than one half of the States.
It is only in the extreme case, the examples of which we have given above, that an amendment of an unentrenched Article without amendment of entrenched Article (1) ; 846 might be had for want of ratification, and this is what was intended by the majority judgment in Sajjan Singh 's case(1), when it applied the doctrine of pith and substance in these circumstances.
The argument that ratification is necessary as article 226 is indirectly affected has therefore no force and must be rejected.
This is equally true with respect to the power of this Court under articles 132 and 136.
Then it is urged that article 245 is enlarged by the Seventeenth Amendment inasmuch as State legislatures and Parliament were freed from the control of Part III in the matter of certain laws affecting, for example.
ryotwari lands, and therefore as article 245 is an entrenched Article there should have been ratification under the proviso.
This argument in our opinion is of the same type as the argument with respect to the effect on article 226 and our answer is the same, namely, that there is no direct effect on article 245 by the amendment and the indirect effect, if. any, does not require that there should have been ratification in the present case.
It is then urged that ratification is necessary as article 31 B deals with State legislation and in any case Parliament cannot make, any law with respect to Acts which were put in the Ninth Schedule and therefore Parliament could not amend the Constitution in the manner in which it was done by making additions in the Ninth Schedule, both for want of ratification and for want of legislative competence.
The answer to this argument was given in Sahkari Prasad 's case(2) and it was observed there that "Article 31 A and 31 B really seek to save a certain class of laws and certain specified laws already passed from the combined operation of article 13 read with other relevant Articles of Part III.
The new Articles being thus essentially amendments of the Con stitution, Parliament had the power of enacting them.
That laws thus saved relate to matters covered by List II does not in any way affect the position.
It was said that Parliament could not validate a law which it had no power to enact.
The proposition holds good where.
the validity of the impugned provision turns on whether the subject matter, falls within or without the jurisdiction of the legislature which passed it.
But to make a law which contravenes the Constitution, constitutionally valid is a matter of constitutional amendment and as such it falls within the exclusive power of Parliament." (1) ; (2) ; 847 We respectfully agree with these observations.
They succinctly put the legal and constitutional position with respect to the 'validity of Arts, 3 1 A and 3 1 B.
It seems to us that article 3 1 B in particular is a legislative drafting device which compendiously puts in one place amendments which would otherwise have been added to the Constitution under various Articles in Part III.
The laws in the Ninth Schedule have by the device of article 3 1 B been excepted from the various provisions in Part ]III, which affected them and this exception could only be made by Parliament.
The infirmity in the Arts put in the Ninth Schedule was apprehended to be a constitutional infirmity on the ground that those laws might take away or abridge rights conferred by Part HI.
Such a constitutional infirmity could not be cured by State legislatures in any way and could only be cured by Parliament by constitutional amendment.
What Parliament in fact did by including various Acts in the Ninth Schedule read with article 3 1 B was to amend the various provisions in Part III, which affected these Acts by making them an exception to those provisions in Part III.
This could only be done by Parliament under the constituent power it had under article 368 and there was no question of the application of the proviso in such a case, for Parliament was amending Part III only with respect to these laws.
The laws had already been passed by State legislatures and it was their constitutional infirmity, if any, which was being cured by the device adopted in article 3 1 B read with the Ninth Schedule, the amendment 'being only of the relevant provisions of Part III which was compendiously put in one place in article 3 1 B. Parliament could alone do it under article 368 and there was no necessity for any ratification under the proviso, for amendment of Part III is not entrenched in the proviso.
Nor is there any force in the argument that Parliament could ' not validate those laws by curing the constitutional infirmity because they dealt with land which is in List 11 of the Seventh Schedule to the Constitution over which State Legislatures have exclusive legislative power.
The laws had already been passed by State legislatures under their exclusive powers; what has been done by the Seventeenth Amendment is to cure the constitutional ' infirmity, if any, in these laws in relation to Part III.
That could only be done by Parliament and in so doing Parliament was not encroaching on the exclusive legislative power of the State.
The States had already passed the laws and all that was done by the Seventeenth Amendment was to cure any constitutional infirmity in the laws by including them in the Ninth Schedule read with article 31 B. We must therefore reject the argument that the Seventeenth Amendment required ratification because laws put in the Ninth Schedule were State law ,.
We must equally reject the argument that as these laws dealt with land, which is in the 848 exclusive legislative power of State legislature, Parliament could not cure the constitutional infirmity, if any, in these laws by putting them in the Ninth Schedule.
We now come to what may be called the argument of fear.
It is urged that if article 368 confers complete power to amend each and every provision of the Constitution as we have held that it does frightful consequences will follow on such an interpretation.
If Parliament is clothed with such a power to amend the Constitution it may proceed to do away with fundamental rights altogether, it may abolish elected legislatures, it may change the present form of Government, it may do away with the federal structure and create a unitary state instead, and so on.
It is therefore argued that we should give a limited interpretation to the power of amendment contained in article 368, as otherwise we shall be giving power to Parliament to destroy the Constitution itself.
This argument is really a political argument and cannot be taken into account in interpreting article 368 when its meaning to our mind is clear.
But as the argument was urged with a good deal of force on behalf of the petitioners and was met with equal force on behalf of the Union and the States, we propose to deal with it briefly.
Now, if this argument means that Parliament may abuse its power of amendment conferred by article 368, all that need be said in reply is that mere possibility of abuse cannot result in courts withholding the power if the Constitution grants it.
It is well settled so far as ordinary laws are concerned that mere possibility of abuse will not induce courts to hold that the power is not there, if the law is valid and its terms clearly confer the power.
The same principle in our opinion applies to the Constitution.
If the Constitution gives a certain power and its terms are clear, there is no reason why that power should be withheld simply because of possibility of abuse.
If we may say so, possibility of abuse of any power granted to any authority is always there; and if possibility of abuse is a reason for withholding the power, no power whatever can ever be conferred on any authority, be it "executive, legislative or even judicial.
Therefore, the so called fear of frightful consequences, which has been urged on behalf of the Petitioners (if we hold, as we do, that the power to amend the Constitution is unfettered by any implied limitations), is no ground for withholding the power, for we have no reason to suppose that Parliament on whom such power is ,conferred will abuse it.
Further even if it abuses the power of constitutional amendment under article 368 the check in such circumstances is not in courts but is in the people who elect members of Parliament.
The argument for giving a limited 849 meaning to article 368 because of possibility of abuse must therefore be rejected.
The other aspect of this argument of fear is that we should not make the Constitution too flexible so that it may be open to the requisite majority with the requisite ratification to make changes too frequently in the Constitution.
It is said that the Constitution is an organic document for the governance of the country and it is expected to endure and give stability to the institution which it provides.
That is undoubtedly so and this is.
very true of a written federal Constitution.
But a perusal of.
various Constitutions of the world shows that there are usually provisions for amendment of the Constitution in the Constitution itself.
This power to amend a Constitution may be rigid or flexible in varying degrees.
Jurists have felt that where the power to amend the Constitution is made too rigid and the people outgrow a particular Constitution and feel that it should be amended but cannot do so because of the rigidity of the Constitution, they break the Constitution, and this breaking is more often than not by violent revolution.
It is admitted by even those writers on the United States Constitution who are of the view that there are certain basic features which cannot be amended and who would thus make the U. section Constitution even more rigid ' than it is; that howsoever rigid the Constitution may be its rigidity will not stop the people from breaking it if they have outgrown it and this breaking is, generally speaking, by violent revolution.
So, making our Constitution rigid by putting the interpretation which the petitioners want us to put on it will not stop the frightfulness which is conjured up before us on behalf of the petitioners.
If anything, an interpretation which will make our Constitution rigid in the manner in which the petitioner want the amending power in article 368 to be interpreted will make a violent revolution, followed by frightfulness of which the petitioners are afraid, a nearer possibility than an interpretation which will make it flexible.
It is clear that our Constitution makers wanted to avoid ' making the Constitution too rigid.
It is equally clear that they did not want to make an amendment of the Constitution too easy.
They preferred an intermediate course which would make,the Constitution flexible and would still not allow it to be amended too easily.
That is why article 368 provides for special majorities of the two Houses for the purpose of amendment of the Constitution.
Besides it also provides for ratification by more than half the States in case of entrenched Provisions in the proviso.
Subject to these limitations, the Constitution has been, made moderately flexible to allow any change when the people feel that change is necessary.
The necessity for special majorities 850 in each House separately and, the necessity for, ratification by more than half the States in certain cases appear to us to be sufficient safeguards to prevent too easy change in the Constitution without making it too rigid.
But it is said that, in the last sixteen Years, a large number of amendments have been made to the constitution and that shows that the power to amend is much too easy and should be restricted by judicial interpretation.
Now, judicial interpretation cannot restrict the power on the basis of a political argument.
It has to interpret the Constitution and finds it on the basis of well known,canons of construction,and on the terms of article 368 in particular.
If on those terms it is clear we think it is that power to amend is subject to no limitations except those to be expressly found in the Constitution, courts must give effect to that.
The fact that 'm the last sixteen years a large number of amendments could be made and have been made is in our opinion due to the accident that one party has been returned by electors in sufficient strength to be able to command the special majorities which are required under article 368, not only at the Centre but also in all the Stites.
It ' is because of this circumstance that we have had so many amendments in the course of the last sixteen years.
But that in our opinion is no ground for limiting the clear words of article 368.
The power of amendment contained in a written federal Con stitution is a safety valve which to a large extent provides for stable growth and makes violent revolution more or less unnecessary.
It has been said by text book writers that the power of amendment, though it allows for change, also makes a Constitution long lived and stable and serves the needs of the people from time to time.
If this power to amend is made too rigid it loses its value as a safety valve.
The more rigid a Constitution the more likely it is that people will outgrow it and throw it over board violently.
On the other hand, if the Constitution is flexible (though it may not be made too easy to modify it) the power of amendment provides for stability of the Constitution itself and for ordered progress of the nation.
If therefore there had to be a choice between giving an interpretation to article 368 which would make our Constitution rigid and giving an interpretation which would make it flexible, we would prefer to make it flexible, so that it may endure for a long period of time and may, if necessary, be amended from time to time in accordance with the progress in the ideas of the people for whom it is meant.
But we feel that it is not necessary to go to this extent, for that would be entering into the field of politics.
As we see the terms of article 368, we are clearly Df opinion that the Constitutionmakers wanted to make our Constitution reasonably flexible and ,.that the interpretation that we have given to article 368 is in 851 consonance with the terms thereof and the intention of those who made it.
We therefore reject the argument of fear altogether.
This brings us to the argument of stare decisis raised on behalf of the Union of India and the States.
The argument is put thus.
After the decision of the Patna High Court invalidating the Bihar Land Reforms Act, 1950, Parliament passed the First Amendment to the Constitution.
That Amendment was challenged in this Court by a number of writ petitions and was upheld in Sankari Prasad 's case( ) in 1951.
That case practically stood unchallenged till Sajjan Singh 's case(2) in 1964 after the Seventeenth Amendment was passed.
Thus in the course of these fifteen years or so a large number of State Acts were passed on the basis of the First Amendment by which in particular articles 31 A and 31 B were introduced in the Constitution.
It is said that though Sankari Prasad 's case (1) has stood for less than 15 years there have been so many laws dealing with agrarian reforms passed on the basis of the First Amendment which was upheld by this Court that the short period for which that case has stood should not stand in the way of this Court acting an the principle of, stare decisis.
The reason for this is that an agrarian revolution, has taken place all over the country after the First Amendment by State laws passed on the faith of the decision of this Court in Sankari Prasad 's case(1).
This agrarian revolution has led to millions of acres of land having changed hands and millions of now titles having been created.
So it is urged that the un animous decision in Sankari Prasad 's case(2), which was challenged when the Seventeenth Amendment was passed and was upheld by majority in Sajjan Singh 's case(2) should not now be disturbed as its disturbance would create chaos in the country, particularly in the agrarian sector which constitutes the vast majority of the population in this country.
We are of opinion that there is force in this argument .
Though the period for which Sankari Prasad 's case(1) has stood unchallenged is not long, the effects which have followed in, the passing of State laws on the faith of that decision ', are so overwhelming that we should not disturb the decision in that case.
It is not disputed that millions of acres of land have changed hands and millions of new titles in agricultural lands have been created and the State laws dealing with Agricultural land which have been passed in the course of the last fifteen years after the decision in Samkari Prasad 's case(1) have brought about an agrarian revolution.
Agricultural population constitutes a vast majority of the population in this country.
In these circumstances it would in our opinion be wrong to hold now that (1) ; (2) ; 852 Sankari Prasad 's case (1) was not correctly decided and thus disturb all that has been done during the last fifteen years and create chaos into the lives of millions.
of our countrymen who have benefited by these laws relating, to agrarian reforms.
We would in the circumstances accept the argument on behalf of the Union of India and the States that this is the fittest possible case in which the principle of stare decisis should be applied.
On this basis also, apart from our view that Sankari Prasad 's case (1) was in fact rightly decided, we would not interfere with that decision now.
But it is urged that instead of following the principle of stare decisis which would make die decision in Sankari Prasad 's case(1) good for all times.
, we should follow the doctrine of prospective over ruling, which has been evolved by some United States courts so that everything that has been done up to now, including the Seventeenth Amendment would be held good but in future it would not be open to Parliament to amend Part III by taking away or abridging any of the rights conferred thereby and, if the argument as to implied limitations on the power to amend is accepted, further limit the power of Parliament to amend what may be called basic features of the Constitution.
We must say that we are not prepared to accept the doctrine of prospective over ruling.
We do not know whether this doctrine which it is urged should be applied to constitutional amendment would also be applied to amendments of ordinary laws.
We find it difficult to visualise what would be the effect of this doctrine if it is applied to amendment of ordinary laws.
We have so far been following in this country the well known doctrine that courts declare law and that a declaration made by a court is the law of the land and takes effect from the date the law came into force.
We would on principle be loath to change that well known doctrine and supersede it by the doctrine of prospective over ruling.
Further it seems to us that in view of the provisions of article 13(2) it would be impossible to apply the doctrine of prospective over ruling in our country, particularly where a law infringes fundamental rights.
Article 13(2) lays down that all.
laws taking away or abridging fundamental rights would be void to the extent of contravention.
It has been held by this Court in Deep Chand vs The State of Uttar Pradesh (2) that a law made after the Constitution came into force which infringes fundamental rights is a stillborn law and that the prohibition contained in article 13(2) went to the root of the State power of legislation and any law made in contravention of that provision was void ab initio.
This case has been followed in Mahendra Lal Jaini vs The State of Uttar Pradesh(3).
In the face of these (1) ; (2) [1959] Supp. 2 S.C.R. 8.
(3) [1963] Supp. 1.
S.C.R. 912.
853 decisions it is impossible to apply the principle of prospective over ruling in this country so far as ordinary laws are concerned.
Further, if the word "law" in article 13(2) includes an amendment of the Constitution, the same principle will apply, for that amendment would be stillborn if it infringes any fundamental rights contained in Part III.
In these circumstances, it would be impossible to apply the principle of prospective over ruling to constitutional amendments also.
On the other hand, if the word "law" in article 13(2) does not include an amendment of the Constitution, then there is no necessity of applying the principle of prospective over ruling, for in that case unless some limitations on the power of amendment of the Constitution are implied the amendment under article 368 would not be liable to be tested under article 13(2).
We are therefore unable to apply the doctrine of prospective over ruling in the circumstances.
Further as we are of opinion that this is the fittest possible case in which the prin ciple of stare decisis applies,we must uphold Sankari Prasad 's case (1) for this reason also.
Lastly we would refer to the following observations in Sajjan Singh 's case(2) (at pp.
947 48) with respect to over ruling earlier judgments of this Court and specially those which are unanimious like Sankari Prasad 's case(1): "It is true that the Constitution does not place any restriction on our powers to review our earlier decisions or even to depart from them and there can be no doubt that in matters relating to the decision of constitutional points which have a significant impact on the fundamental rights of citizens, we would be prepared to. ' review our earlier decisions in the interest of public good. . .
Even so, the normal principle that "judgments pronounced by this Court would be final, cannot be ignored and unless considerations of a substantial and compelling character make it necessary to.
do so, we should be slow to doubt the correctness of previous decisions.or to depart from them.
"It is universally recognised that in regard to a large number of constitutional problems which are brought before this Court for its decision, complex and difficult questions arise and on many of such questions two views are possible.
Therefore, if one view has been taken.
by this Court after mature deliberation, the fact that another Bench is inclined to take a different view may not justify the Court in reconsidering the earlier decision or in departing from, it. . .
Even so, the Court should be re (1) (1952] S.C.R. 89.
(2) [1965] 1 S.C.R. 933.
p. CI/67 9 854 luctant to accede to the suggestion that its earlier decisions should be light heartedly reviewed and departed from.
In such a case the test should be: is it absolutely necessary and essential that the question already decided should be reopened The answer to this question would depend on the nature of the infirmity alleged in the earlier decision, its impact on public good, and the validity and compelling character of the considerations urged in support of the contrary view.
If the said decision has been followed in a large number of cases, that again is a factor which must be taken into account.
" A similar view was taken in the Keshav Mills Company Limited vs Commissioner of Income tax,(1) where it was observed that ". before a previous decision is pronounced to be plainly erroneous, the Court must be satisfied with a fair amount of unanimity amongst its members that a revision of the said view is fully justified.
" These principles were applied in Sajjan Singh 's case(2) and it was observed that if Sankari Prasad 's case(3) were to be overruled, "it would lead to the inevitable consequence that the amendments made in the Constitution both in 1951 and 1955 would be rendered invalid and a large number of decisions dealing with the validity of the Acts included in the Ninth Schedule which have been pronounced by, different High Courts ever since the decision of this Court in Sankari Prasad 's case(3) was declared, would also be exposed.
to serious jeopardy.
" The majority in that case therefore was not in favour of reviewing Sankari Prasad 's case(".) even so in View of the argument raised and the importance of the question it considered the arguments against that decision and came to the conclusion its that that case was rightly decided We may add that besides so many cases in the High Courts there have been a large number of cases in this Court to which it is unnecessary to refer where on the faith of various amendments made in the Constitution, particularly the First, the Fourth and the Sixteenth, amending fundamental rights, this Court has upheld the, validity of various Acts on the basis of these amendments.
Further we would be very reluctant to over rule the unanimous decision in Sankari Prasad 's case.(3) or any other unanimous decision by the slender majority of one in a larger Bench constituted for the purpose.
We say this with great respect and would hold that apart 'from the principle of stare decisis we should not say that the (1) ; (2) ; (3) ; 855 unanimous judgment in Sankari Prasad 's case(,) was wrongly decided by such a slender majority in this Special Bench.
We therefore hold that Sankari Prasad 's cases(1) was correctly decided and that the majority,in Sajjan Singh 's case(2) WAS Correct in following that decision.
We would follow the decision in Sankari Prasad 's case(1) even now as in our opinion it was correctly decided. ' Following that decision we hold that the Seventeenth Amendment is good.
In view of this decision it is unnecessary to refer to other arguments raised with respect to the two petitions challenging the Mysore Land Reforms Act.
In our view therefore all the three petitions should fail and we would dismiss them.
In the circumstances we would pass no order as to costs.
Hidayatulla.
J In these three writ petitions, the facts of which appear in the two judgment just delivered, the validity of the Punjab Security of Land Tenures Act, 1953 and the Mysore Land Reforms Act, 1953, is principally involved. ' Since these Acts are protected by the Constitution (Seventeenth Amendment) Act, 1964, the validity of the constitutional amendment is also questioned.
Therefore, a much larger field must be traversed because of the claim of the State that no part of the Constitution from the Preamble to the Ninth Schedule, is beyond the provision for amendment contained in article 368.
The article, forms the Twentieth Part of the Constitution and is said to be a code by itself in which reposes a sovereign power, transcending anything elsewhere in the Constitution.
The State submits that (except as stated in the article) there are no limitations on the amending power and denies that there are any implied restrictions.
It claims, therefore, that an amendment of the Constitution Or of any of its part can never be a justiciable issue if the procedure for amendment has been duly followed.
In this claim no exception is made the Preamble, the Fundamental Rights, the guaranteed remedy to uphold them all of them severally and together are said to be capable of being Partially or wholly abrogated by an amendment.
Looked at from, this Point of view the Seven teenth Amendment Act not only 'must be valid but also beyond the Power of the courts to question.
The petitioners, on the other hand, contend that this is to deny the real importance and inviolability of the Fundamental Rights which the Constitution itself, paramount even to article, 368 consideration. ' before we can Acts are valid or not.
(1) ; (2) ; 856 The same questions were before this Court on two earlier occasions.
They arose for the first time immediately after the Constitution (First Amendment) Act, 1951 was adopted and became the subject of a decision of this Court reported in Sri Sankari Prasad Singh Deo vs Union of India(1).
There Patanjali Sastri J. speaking for Harilal Kania C.J., Mukherjea, Das and Chandrasekhara Aiyar, JJ.and himself upholds the First Amendment on the grounds that the power conferred by Part XX is constituent, paramount and sovereign and is, therefore, not subject to article 13(2) which prohibits the making of ordinary laws tending to abridge or take away Fundamental Rights.
The questions were again before the Court in sajjan Singh c. State of Rajasthan(2) when the Seventeenth Amendment was impugned.
The authority of Sankari Prasad 's case(1) was the ministry ofof the argument in support of the validity of the new amendment.
This time the Court was not unanimous although the Court as aas a whole did not strike down the Act.
Three opinions weredelivered by Gajendragadkar, C.J. on behalf of Wanchoo and Raghubar Dayal, JJ.
and himself, by Mudholkar, J. and by me.
I found the reasoning in Sankari Prasad 's case(1) to be unaccept able, although for reasons which I shall give, I refrained from expressing a final opinion.
Mudholkar, J. in his opinion supported me with additional and forceful reasons but he also did not express himself finally on the broader question.
I closed my opinion with the following observations : "I would require stronger reasons than those given in Sankari Prasad 's case(1) to make me accept the view that Fundamental Rights were not really fundamental but were intended to be within the powers of amendment in common with the other parts of the Constitution and without the concurrence of the States.
No doubt article 19 by clauses numbered 2 to 6 allows a curtailment of rights in the public interest.
Ibis shows that Part III is not static.
It Visualises changes and progress but at the same time it preserves the individual rights.
There is hardly any measure of reform which cannot be introduced reasonably, the guarantee of individual liberty notwithstanding.
Even the agrarian reforms could have been partly carried out without Article 31 A and 31 B but they would have cost more to the public exchequer. 'the rights of society are made paramount and they ire placed above those of the individual.
This is as it should be.
But restricting the Fundamental Rights by resort to cls.
2 to 6 of Mt. 19 is (1) ; (2) ; 857 one thing and removing the rights from the Constitution or debilitating them by an amendment is quite another.
This is the implication of Sankari Prasad 's case(1).
It is true that such things would never be, but one is concerned to know if such a doing would be possible." "The Constitution gives so many assurances in Part III that it would be difficult to think that they were the playthings of a special majority.
To hold this would prima facie that the most solemn parts of our Constitution stand on the same footing as any other provision and even on a less firm ground than one on which the articles mentioned in the proviso stand.
The anomaly that article 226 should be somewhat protected but not article 32 must give us pause.
Article 32 does not erect a shield against private conduct but against state conduct including the legislatures (See article 12).
Can the legislature take away this shield ? Perhaps by adopting a liberal construction of article 368 one can say that.
But I am not inclined to play a grammarian 's role.
As at present advised I can only say that the power to make amendments ought not ordinarily to be a means of escape from absolute constitutional restrictions.
" My opposition (lest one misunderstands its veridical charac ter) appears to be cautious and even timid but this was because it was attended by an uneasy feeling that I might have missed some immanent truth beyond what was said in Sankari Prasad 's case(1).
The arguments then were extremely brief.
After hearing full arguments in this case, which have not added to the reasoning of the earlier cases, I am not satisfied that the reasons are cogent enough for me to accept them.
I say it with respect that I felt then, as I do so even more strongly now, that in the two earlier cases, the result was reached by a mechanical juris prudence in which harmonious construction was taken to mean that unless article 368 itself made an exception the existence of any other provision indicative of an implied limitation on the amending power, could not be considered.
This was really to refuse to consider any argument which did not square with the a priori view of the omnicompetence of article 368.
Such reasoning appears to me to be a kind of doctrinaire conceptualism based on an and textual approach supplemented by one concept that an amendment of the Constitution is not an exercise of legislative (1) ; 858 power but of constituent Dower and, therefore, an amendment of the Constitution is not law at all as contemplated by article 13(2).
I. am reminded of the.
words of.
Justice Holmes that "we ,must think things and not words".
The true principle is that if there are two provisions in the Constitution which seem to be hostile, juridical hermeneutics requires the Court to interpret them by combining them and not by destroying one with the aid of the other.
No part in a Constitution is superior to another part unless the Constitution itself says so and there is no accession 'of strength to any provision by calling it a code.
Portalis, the great.
French Jurist .(who helped in the making of the Code Napole on) supplied the correct principle when he said that it is the context of the legal provisions which serves to illustrate the meaning.
of the different parts, so that among them and between them there should be correspondence and harmony.
We have two provisions to reconcile.
Article 368 which says that the Constitution may be amended by, following this and this.
procedure, and article 13(2) which says, the State shall not make any law which takes away or abridges the rights conferred by Part III and that any law made in contravention of the clause shall, to the extent of the contravention, be void.
The question, therefore, is : does this create any limitation upon the amending process ? On the answer to this question depends the solution of all the problems in this case.
It is an error to view our Constitution as if it were a mere organisational document by which the people established the atructure and the mechanism of their Government.
Our Constitution is intended to be much more because it aims at being a social document In which the relationship of society to the indiVidual and of Government to both and the rights of the minorities and the backward classes are clearly laid down.
This social document is headed by a Preamble* which epitomizes the principles on which the Government is intended to function and these principles are later expanded into Fundamental Rights in Part III and the Directive Principles of Policy in Part TV.
The former 'are protected but the latter are not.
The former represent the "PREAMBLE WE THE PEOPLE OF INDIA having solemnly Resolved to .constitute
India into a SOVEREIGN DEMOCRATIC REPUBLIC and to secure all Its citizens: JUSTICE, social, economic and political; EQUALITY of status and of opportunity; and to promote among them.all FRATERNITY assuring the, dignity of the individual and.the unity of Nation: IN OUR CONSTITUENT ASSEMBLY this twenty sixth day of November,1949,do HEREBY ADOPT,ENACT AND GIVE TO OURSELVES THIS CONSTffUTION.
" 859 limits of State action and the latter are the obligations and the duties of the Government as a good and social Government.
Why was it necessary to have the Fundamental Rights at all and make them justiciable ? As we seem to be forgetting our own history so soon let me say that the answer lies there the Nationalist Movement and the birth of the Indian National Congm in 1885 were the direct result of the discriminatory treatment of the Indians in their own country.
The demand for the guarantee of Fundamental Rights had unfortunately to be made.
then to a foreign ruler and it appeared in the Constitution of India Bill framed by the Indian National Congress ten years later.
All that is valuable to an Individual in civilized society, including free speech, imprisonment only by a competent authority, free law education, etc. were claimed therein.
Resolutions of the Congress since then reiterated this demand and the securing of Fundamental Rights in any future Constitution became one of the articles of faith.
To cut the narration short, the main steps may only be mentioned.
Mrs. Besant 's Commonwealth of India Bill 1925 with its seven fundamental rights (the precursor of article 19), the Madras Congress Resolution of 1927 "a constitution on the basis of declaration of rights" the Nehru Report it is obviour, that our first care should be to have the Fundamental Rights guaranteed in a manner which will not permit their withdrawal in any circumstancees , the draft article in the Nehru Constitution "No person shall be deprived of his liberty, nor shall his dwelling or property be entered, requisitioned or confiscated save in accordance with law" , the Independence Resolution of 26th January, 1930 We believe that it is the inalienable right of the Indian people, as of any other people, to have freedom and to enjoy the fruits of their toil and have the necessities of life, so that they may have full opportunities of growth" the Karachi Resolution on Fundamental Rights, Economic and Social Change (1931), the Sapru Report (1945) which for the first time distinguished between justiciable and non ,justiciable rights, the Suggestion of the Cabinet Mission for the constitution of an Advisory Committee on Fundamental and Minority Rights, and, lastly the Committee on Fundamental Rights of the Constituent Assembly, are just a few of the steps to be remembered.
The Fundamental Rights and the Directive Principles were the result.
Fundamental laws are needed to make a Government of laws and not of men and the Directive Principles are needed to lay down the objectives of a good Government.
Our Constitution was not the cause but the result of political and personal freedom".
Since Dicey had said that "the proclamation .
in a Constitution or Charter of the right to personal freedom, or indeed of any other right, gives of itself but slight security that the right has more than a 860 nominal existence",(1) provision had to be made for guaranteeing them andto make them justiciable and enforceable.
This result is reachedby means of articles 12, 13, 32, 136, 141, 144 and 226.
The The High Courts and finally this Court have been made the Judges of whether any legislative or executive action on the part oft the State considered as comprehensively as is possible, offends the Fundamental Rights and article 13(2) declares that legislation which so offends is to be deemed to be void.
It is thus that Parliament cannot today abridge or take away a single Fundamental Right even by a 'unanimous vote in both the Chambers.
But on the argument of the State it has only 'to change the title of the same Act to an Amendment of the Constitution Act and then a majority of the total strength and a 2/3rds majority of the members present and voting in each House may remove not only any of the Fundamental Rights, but the whole Chapter giving them.
And this is said to be possible because of article 368 and its general language which, it is claimed, makes no exception in its text and, therefore, no exception can be implied.
It is obvious that if an Act amending the Constitution is treated as a law it must also be subject to the provisions of article 13(2).
Since the definition of the word 'law ', makes no exception a strenuous eeffort is made on the basis of argument and authority to establish that a constituent power does not result in a law in the ordinary sense.
Distinction is thus made between laws made ordinarily that is to say, from day to day by ordinary majority and laws made occasionally for the amendment of the Constitution by a slightly enhanced majority.
In our Constitution this distinction is not valid in the eye of article 13(2).
It is not essential,, of course, that a difference must always exist in the procedure for the exercise of constituent and ordinary, legislative power.
One has not to go far to find the example of a country in which constitutional law as such may be made by the same agency which makes ordinary laws.
The most outstanding, example is that of England about which de Tocqueville observed.
"the Parliament has an acknowledged right to modify the Constitution; as, therefore, the Constitution may undergo perpetual changes, it does not in reality exist; the Parliament is at once a legislative and a constituent assembly:"(2) of course, the dictum of de Tocqueville that the English Constitution "elle n 'existe point" (it does not exist) is far from accu (1)Dicey: "Law of the Constitution" 10th Edn.
p. 207.
(2)Introduction to the Study of the Law of the Constitution A.V. Dicey Tenth Edn p. 88 quoting from OEuvres completes (14th ed.,1864) (Democratie en Amerique), pp. 166, 167.
861 rate.
There is a vast body of constitutional laws in England which is written and statutory but it is not all found in one place and arranged as a written Constitution usually is.
The Act of Settlement (1701), the Act of Union with Scotland (1707), the Act of Union with Ireland (1800) the Parliament Act (1911) the Representation of the Peoples Acts of 1832, 1867, 1884, 1918, 1928 and 1948, the Ballot Act (1872), the Judicature Acts 1873, 1875 and 1925, the Incitement to Disaffection Act (1934), His Majesty 's Declaration of Abdication Act (1936), the Regency Act (1937) and the various Acts setting up different ministries are examples of what will pass for constitutional law under our system(1).
The Bill of Rights (1689) lays down the fundamental rule in England that taxation may not be levied without the consent of Parliament which in our Constitution has its counterpart in article 265.
In our Constitution also the laws relating to delimitation of constituencies or allotment of seats to such constituencies made or purporting to be made under article 327 or article 328, by reason of the exclusion of the powers of the courts to question them, are rendered constitutional instruments.
Other examples of constitutions which, in addition to constitution proper, contain certain ordinary legislation, having constitutional qualities, also exist.
(2) What then is the real distinction between ordinary law and the law made in the exercise of constituent power? I would say under the scheme of our Constitution none at all.
This distinction has been attempted to be worked out by several authors.
It is not necessary to quote them.
Taking the results obtained by Willoughby(3) it may be said that the fact that a Constitution is written as a Constitution is no distinction because in Britain constitutional law is of both kinds and both parts coexist.
The test that the Constitution requires a different kind of procedure for amendment, also fails because in Britain Parliament by a simple majority makes laws and also amends constitutional statutes.
In our Constitution too, in spite of the claim that article 368 is a code (whatever is meant by the word ,code, here), articles 4, 11 and 169 show that the amendment of the Constitution can be by the ordinary law making procedure.
By this method one of the legislative limbs in a State can be removed or created. 'This destroys at one stroke the claim that article 368 is a code arid also that any special method of amendment of the Constitution is fundamentally necessary.
(1) The list is raken from K. C. Wheare 's: "The Statute of Westminster and Dominion Status" (4th Edn) p. 8.
Dicey and others give different list.
(2) See Constitutions of Austria, Honduras, Nicaragua Peru, Spain and Sweden among others.
The Constitution of Spain, in particular is in several Instruments.
The Constitution of Austria (A t. 149) makes special mention of these constitutional instruments.
(3) Tagore Law Lectures (1924) p. 83.
862 The next test that the courts must apply the Constitution in preference to the ordinary law may also be rejected on the ansalogy of the British practice.
There, every statute has equal standing.
Therefore, the only difference can be said to arise from the fact that.constitutional laws are generally amendable under a process which in varying degrees, is more difficult or elaborate.
This may give a distinct character to the law of the Constitution but it does not serve to distinguish it from the other laws of the land for purposes of article 13(2).
Another difference is that in the written constitutions the form and power of Government alone are to be found and not rules of private law as is the case with ordinary laws.
But this is also not an invariable rule.
The Ame Constitution and our Constitution itself are outstanding examples There are certain other differences of degree, such as that nary _legislation may be tentative or temporary, more detailed or secondary, while the Constitution is intended to be permanent, general and primary.
Because it creates limitations on the ordinary legislative power, constitutional law in a sense is fundamental law, but if the legislative and constituent processes can become one, Ls there any reason why the result should be regarded as law in the one case and not in the other ? On the whole, therefore, as observed in the American Jurisprudence "It should be noticed however that a statute and a constitution, though of unequal dignity are both laws and each rests on the will of the people. . " A Constitution is law which is intended to be, for all time and is difficult to change so that it may not be subject to "impulses ofmajority" "temporary excitement and popular caprice or passion"(2).
I agree with the authors cited before us that the power of amendment must be possessed by the State.
I do not take a narrow view of the word "amendment" as including only minor changes within the general framework.
By an amendment new matter may be added, old matter removed or altered.
I alm concede that the reason for the amendment of the Constitution is a political matter although I do not go as far as some Justice of the Supreme court of the United States did in Coleman vs Miller(3) that the whole process is "political in its entirely from submission until an Amendment becomes part of the Constitution and is not subject to judicial guidance, control or interference at any point.
" There are fundamental differences between our Con (1) American Jurispruence Vol.
II Section 3.
(2) Amendment is expressly called a legislative process in the Constitutions of Colombia:, Costa Rica, Hungary, Panama and Peru.
In Portugal the ordinary legislatures enjoy constituent powers every 10 years.
(3) 3)7 U.S. 443 ; 863 stitution and the Constitution of the United States of America.
Indeed this: dictum of the four Justices based upon, the case of Luther vs Borden(1) has lost some of its force after Baker vs Carr(2) A Republic must, as says Story, (8) possess the means for altering and improving the fabric of the Government so as, to promote the happiness and safety of the people.
The power is also needed to disarm opposition and prevent factions over the Constitution.
The power, however, is not intended to be used for experiments or as an escape from restrictions against undue state action enacted in the Constitution itself.
Nor % 'LS the power of amendment available for the purpose of removing express or fmplied restrictions against the State.
Here I make a difference between Government and State which I shall explain presently.
As Willoughby(4) points out constitutional law ordinarily limits Government but not the State because a constitutional law is the creation of the State for its own purpose.
But there is nothing to prevent the State from limiting itself.
The rights and duties of the individual and the manner in which such rights are to be exercised and enforced ;ire ordinarily to be found in the laws though some of the Constitutions also fix them.
It is now customary to have such rights guaranteed in the Constitution.
Peaslee,(5) writing in 1956 says that about 88% of the national Constitutions contain clauses respecting individual liberty and fair legal process; 83% respecting freedom of speech and the press; 82% respecting property right; 80% respecting rights of assembly and association; 80% respecting rights of conscience and religion; 79% res pecting secrecy of correspondence and inviolability of domi cile; 78% respecting education; 73% respecting equality 64% respecting right to petition; 56% respecting labour; 51% respecting social security; 47% respecting rights of movement within, and to and from the nation; 47% respecting health and motherhood; and 35% respecting the non retroactivity of laws.
In some of the Constitutions there is an attempt to put a restriction against the State seeking to whittle down the rights conferred on the individual.
Our Constitution is the most outstanding example of this restriction which is to be found in article 13(2). 'The State is no doubt legally supreme but in the supremacy of its powers it may create, impediments on its own sovereignty.
Government is always bound by the restrictions created in favour of fundamental Rights but the State may or may not be.
Amendment may be open to the State according to the procedure laid (1) (2) ; (7 L. Ed.
2d 633).
(3) Commentaries on the Constittition of the United States (1833) Vol.
III pp 686 687.
(4) Tagore Law Lectures, p. 84.
(5) Constitutions of Nations, Vol.
I (2nd Edn.) p. 7.
863 stitution and the Constitution of the United States of America.this: dicttan of the four Justices based upon, the case of Luther vs Borden(1) has lost some of its force after Baker vs Carr(2).
A Republic must, as says Story, (,,) ssess the means for ai and:improving the 'fabric of tc Government so as, to promote the happiness and safety, of the people.
The power, is dw needed to disarm opposition and prevent factions over theThe power, however, is not intended to be used for experiments or as an escape from restrictions against undue state action enacted in the Constitution itself.
Nor is the power of amendment available for the purpose of removing express or implied restrictions against the State.
Here I make a difference between Government and Statewhich I shall explain presently.
As Willoughby(4) points out wmtitutional law ordinarily limits Government but not the State because a constitutional la,* is the creation of the State for its own pu, se.
But there is nothing to prevent the State from rpo limiting itself.
The rights and duties of the individual and the. manner in which such rights are to be exercised and enforced are ordinarily to be found in the laws though some of the Constitutions also fix them.
It now customary to have such rights guaranteed in the Constitution.
Peaslee,(5) writing in 1956 says that about 88,Yo of the, national Constitutions contain clauses respecting individual liberty and fair legal process; 83% respecting freedom of speech and the press; 82% respecting property right; 80% respecting rights of assembly and association; 80% respecting rights of conscience and religion; 79% respecting secrecy of correspondence and ' inviolability of domicile; 78% respecting education; 73% respecting equality; .64% respecting right to petition; 56% respecting labour; 51% respecting social security; 47% respecting rights of movement within, and to and from the nation; 47% respecting health and motherhood; and 35% respecting the non retroactivity of laws.
In some of the Constitutions there is an attempt to put a restriction Against the State seeking to whittle down the rights conferred ' on the 'individual.
Our Constitution is the most outstanding i6xample of this restriction Which is to be found in article 1.3(2).
,Tbe State is no doubt legally supreme but in the supremacy of its powers it may creat e impediments on its OI%M sovereignty.
Govent is always bound by the restrictions created in favour of Fundamental Rights but the State may or may not be.
Amendment may be open to the State according to the procedure lai(r (1)7 How. 1 (2) ; (7 L. Ed.
2d 633).
(3) Commentaries on the Constitution of the United, Sta:tes (1 833) 'Vol.
III PP, 686 687.
(4)Tagore Law Lectures, p. 84.
(5)Constitutions of Nations, Vol.
I (2nd Edn.) p. 7. 864 down by the Constitution.
There is nothing, however, to prevent the State from placing certain matters outside the amending procedure( ').
Examples of this exist in several Constitutions of the world : see article 5 of the American Constitution; article 95 of the Constitution of France,; article 95 of the Constitution of Finland; article 97 of the Constitution of Cambodia; article 183 of the Constitution of Greece; article 97 of the Japanese Constitution; article 139 of the Italian Constitution, to mention only a few.
When this happens the ordinary procedure of amendment ,ceases to apply.
The unlimited competence (the kompetenz kompetenz of the Germans) does not flow from the amendatory process.
Amendment can then be by a fresh constituent body.
To attempt to do this otherwise is to attempt a revolution.
I do not known why the word "revolution", which I have used before, should evoke in some persons an image of violence and subversion.
The whole American Constitution was the result of a bloodless revolution and in a sense so was ours.
The adoption of the whole Constitution and the adoption of an amendment to the Constitution have much in common.
An amendment of the Constitution has been aptly called a Constitution in little and the same question arises whether it is by a legal process or by revolution.
There is no third alternative.
An amendment, which repeals the earlier Constitution, unless legal, is achieved by revolution.
As stated in the American Jurisprudence : "An attempt by the majority to change the fundamental law in violation of self imposed restrictions is unconstitutional and revolutionary".
( ') There are illegal and violent revolutions and illegal and peaceful revolutions.
Modification of Constitution can only be by the operation of a certain number of wills acting on other wills.
The pressure runs through a broad spectrum, harsh at one end and gentle at the other.
But whatever the pressure may be, kind or cruel, the revolution is always there if the change is not legal.
The difference is one of method, not of kind.
Political thinking starts from the few at the top and works downward more often than in the reverse direction.
It is wrong to think that masses alone, called "the people" after Mazini, or "the proletariate" after Marx, 'begin a revolutionary change.
Political changes are always preceded by changes in thought in a few.
They may be outside the (1) In the Constitution of Honduras, partial amendment only is possible.
For a complete amendment a Constituent Assembly has to be convoked.
In the Constitution of Brazil, the Constitution cannot be amended when there is a state of seige (our emergency).
In Turkey an amendment of Article 1 cannot even be proposed.
(2) Vol.
12, Section 25 pp.
629 630.
865 Government or in it.
It is a revolution nevertheless, if an attempt is made to alter the will of the people in an illegal manner.
A revolution is successful only if there is consent and acquiescence and a failure if there is not.
Courts can interfere to nullify the revolutionary change because in all cases of revolution there is infraction of existing legality.
It is wrong to classify as revolution some thing coming from outside the Government and an illegality committed by the Government against the Constitution as evolution.
I am mindful of the observations of Justice Holmes, that "We need education in the obvious to learn to transcend our own convictions and to leave room for much that we hold dear to be done away with short of revolution, by the orderly change of law.
"(1) But the problem we are faced with is not an orderly change of law but of a claim to a revolutionary change against the vitals of the Constitution.
In such a case the apprehension is that democracy may be lost if there is no liberty based on law and law based on equality.
The protection of the fundamental Rights is necessary so that we may not walk in fear of democracy itself.
Having assumed the distinction between Government and ' State let me now explain what I mean by that distinction and what the force of article 13(2) in that context is.
I shall begin first by reading the pertinent article.
Article 13 (2), which I quoted earlier, may again be read here: "13. . . . . . (2)The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of contravention, be void.
" The definition of the State in article 12 reads "12.
In this Part, unless the context otherwise requires, "the State" includes.the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.
" The State is the sum total of all the agencies which are also individually mentioned in article 12 and by the definition all the parts severally are also included in the prohibition.
Now see how 'law ' is defined: "13. . . . . (1) The Mind and Faith of Justice Holmes p. 390. 866 (3)In this article, unless the context otherwise requires, (a) "law" includes any ordinance, order, bye law, rule, regulation, notification, custom or usage having in the territory of India the force of law;" In Sajjan Singh 's case(1) I said that if amendments of the constitution were meant to be excluded from the word "law" it was the easiest thing to add to the definition the further words "but shall not include an amendment of the Constitution".
it 'LS argued now before us that this wag not necessary because article 368 does not make any exception.
This argument came at all stages like a refrain and is the real cause of the obfuscation in the opposite view.
Those who entertain this thought do not pause to consider : why make a prohibition against the State? As Cooley said: "there never was a republican Constitution which delegated to functionaries all the latent powers which lie dormant in every nation and are boundless in extent.
and incapable of definition.
", If the State wields more power than the functionaries there must be a difference between the.
State and its agencies such as Government, Parliament, the Legislatures of the States and the local and other authorities.
Obviously, the State means more than any of there or all of them put together.
By making the State subject 'to Fundamental Rights it is clearly stated in article 13 (2) that any ' ,of the agencies acting alone or all the agencies, acting together are not above the Fundamental Rights.
Therefore, when the House .of the People or the Council of States introduces a Bill for the abridgement of the Fundamental Rights, it ignores the injunction against it and even if the two Houses pass the Bill the injunction is next operative against the President since the expression "Government of India" in the General Clauses Act means the President of India.
This is equally true of ordinary laws and laws seeking to amend the Constitution.
The meaning of the word "State" will become clear if I draw attention at this stage to article 325 of the Constitution of Nicargua, which reads as follows: "325.
The agencies of the Government, jointly or separately, are, for bidden to suspend the Constitution or to restrict she rights granted by it, except in the cases provided therein.
" In our Constitution the agencies of the State are controlled jointly and separately and the prohibition is against the whole force of (1) ; 867 the State acting either in its executive or legislative capacity.
Ile of the Executive is more important than even the Legislature.
In modem politics run on parliamentary democracy the Cabinet attains a position of dominance over the Legislature.
The Executive, therefore, can use the Legislature as a means of securing changes in the laws which it desires.
It happened in Germany under Hitler.
The fact has been noticed by numerous writers.
for example, Wade and Philips(1), Sir Ivor Jennings(2) , Dawson(3), Keith(4) and Ramsay Muir(5).
Dawson in particular said that a Cabinet is no longer responsible to the Commons but the Commons has become instead responsible to the Government.
Ivor Jennings added that if a Government had majority it could always secure the legislation.
The others pointed out that the position of the Cabinet towards Parliament tends to assume more or less dictatorial powers and that was why people blamed Government, this is to say, the Cabinet rather than Parliament for ineffective and harsh laws.
This is true of our country also regarding administration and Station.
Fortunately, this is avoided at least in so far as the Fundamental Rights are concerned.
Absolute, arbitrary power in defiance of Fundamental Rights exist nowhere under our Constitution, not even in the largest majority.
The people 's representatives have, of course, inalienable and undisputable right to alter, reform or abolish the Government in any manner they think fit, but the declarations of the Fundamental Rights of the citizens are the inalienable rights of the people.
Ile extent of the power of the rulers at any time is, measured by the Fundamental Rights.
It is wrong to think of them as rights within the Parliament 's giving or taking.
Our Constitution enables an individual to oppose successfully the whole community and the State and claim his rights.
This is because the Fundamental Rights are I so safe guarded that within the limits set by the Constitution they are inviolate.
The Constitution has itself said what protection has been created round the person and property of the citi zens and to what extent this protection may give way to the general good.
it is wrong to invoke the Directive Principles as if there is some antinomy between them and the Fundamental Rights.
The Directive Principles lay down the routes of State but such action must avoid the restrictions stated in the Fundamental Rights.
Prof. Anderson (6) taking the constitutional amendments, as they have been in our country, considered the Directive principles to be more potent than the Fundamental (1) Constitutional Law, 6th Edn.
p. 27.
(2) Parliament (1957) pp.
11 12.
(3) Government of Canada (1952) Chapter XIX.
(4) An Introduction to British Constitutional Law (1931) P. 48, (5) How Britain is Governed P. 5,6.
(6) Changing Law in Developing Countries, pp. 88, 89. 868 Rights.
That they are not, is clear when one takes the Fundamental Rights.
with the guaranteed remedies.
The Directive Principles are not justiciable but the Fundamental Rights are ' made justiciable.
This gives a judicial control and check over State action even within the four corners of the Directive Principles.
It cannot be conceived that in following the Directive Principles the Fundamental Rights (say for example, the equality clause) can be ignored.
If it is attempted, then .
the action is capable of being struck down.
In the same way, if an amendment of the Constitution is law for the reasons explained by me, such an amendment is also open to challenge under article 32, if it offends against the Fundamental Rights by abridging or taking them away.
Of course, it is always open to better Fundamental Rights.
A law or amendment of the Constitution would offend the Fundamental Rights only when it attempts to abridge or take them away.
The importance of Fundamental Rights in the world of today cannot be lost sight of.
On December 10, 1948, the General.
Assembly of the United Nations adopted the Universal Declaration of Human Rights without a dissent.
This draft was made after the Third Committee of the United Nations had devoted 85 meetings to it.
The Declaration represents the civil, political and religious liberties for which men have struggled through the centuries and those new social and economic rights of the Individual which the Nations are increasingly recognising in their Constitutions.
Some of these were proclaimed during the French Revolution and areincluded in the declarations of Nations taking pride in the dignity and liberty of the Individual.
They are epitomized in the Preamble, and more fully expressed in Parts III and IV of our Constitution.
These Declarations wherever found are intended to give a key to social progress by envisaging rights to work, to education and to 'social insurance.
The Nations of the world are now in the second stage, where Covenants are being signed on the part of the States to respect such rights.
United Nations Human Rights Commission has worked to produce two drafts one dealing, with civil and political rights and the other with economic, social and cultural rights.
, The third stage is still in its infancy in which it is hoped to provide for the enforcement of these rights on an international basis.
The Regional Charter of the Human Rights under which there is established already a European Commission of Human Rights to investigate and report on violations of Human Rights, is a significant step in that direction.
After 1955 the European Commission has become competent to receive complaints from individuals although the enforceability of Human Rights on an international basis is still far from being achieved.
If one compares the Uni 869 versal Declaration with Parts III and IV of our Constitution one finds remarkable similarity in the two.
It is significant that our Committee on Fundamental Rights was deliberating when the This Committee of the United Nations was deliberating on the.
Universal Declaration of Human Rights.
Both are manifestos of man 's inviolable and fundamental freedoms.
While the world is anxious to secure Fundamental Rights in ternationally, it is a little surprising that some intellectuals in our country, whom we may call "classe non classe" after Hegel, think of the Directive Principles in our Constitution as if they were superior to Fundamental Rights.
As a modern philosopher(1) said such people 'do lip service ' to freedom thinking all the time in terms of social justice "with 'freedom ' as a by product".
Therefore, in.
their scheme of things Fundamental Rights become only an epitheton ornans.
One does not know what they believe in the communistic millennium of Marx or the individualistic Utopia of Bastiat.
To them an amendment of the Fundamental Rights is permissible if it can be said to be within a scheme of a supposed socioeconomic reform, however, much the danger to liberty, dignity and freedom of the Individual.
There are others who hold to liberty and freedom of the.
Individual under all conditions.
Compare the attitude of Middleton Murray who would have Communism provided "there was universal freedom of speech, of association, of elections and of Parliament" To such the liberty and dignity of the Individual are inviolable.
Of course, the liberty of the individual under our Constitution, though meant to be fundamental, is subject to such restrictions as the .
needs of society dictate.
These are expressly mentioned in the Constitution itself in the hope that no further limitations would require to be imposed at any time.
I do not for a moment suggest that the question about reasonableness, expediency or desirability of the amendments of the Constitution from a political angle is to be considered by the courts.
But what I do say is that the possession of the necessary majority does not put 'any party above the constitutional limitations implicit in the Constitution.
It is obvious that the Constituent Assembly in making the Fundamental Rights justiciable was not justisfied with reliance on the sense of self restraint or public opinion(2) on which the majority in Sajjan Singh 's(3) case does.
This is not argument of fear: The question to ask is : can a party, which enjoys 2/3rds majority today, before it (1)Benedetto Croce.
(2)Sir Robert Peel calls it "that great compound of foiiy, weakness, prejudice, wrong feeling, right feeling, obstinacy and newspaper paragraphs" (3)[1965] 1 S.C.R. 933.
CI/67 10 870 loses it, amend article 368 in such wise that a simple majority would be sufficient for the future amendments of the constitution ? Suppose it did so, would there be any difference between the constitutional and the Ordinary laws made thereafter ? The liberty of the Individual has to be fundamental and it has been so declared by the people.
Parliament today is not the constituent body as the Constituent Assembly was, but is a constituted body which must bear true, allegiance to the Constitution 'as by law established.
To change the Fundamental part of the Individual 's liberty is a usurpation of constituent functions be cause they have been placed outside the scope of the power of constituted.
Parliament.
It is obvious that Parliament need not now legislate at all.
It has spread the umbrella of article 31 B and .has only to add, a clause that all legislation involving Fundamental Rights would be deemed to be within that protection hereafter.
Thus the only palladium against legislative dictatorship may be removed by a 2/3rds majority not only in praesanti but, defuturo.
This can hardly be open to a constituted Parliament.
Having established, that there is no difference between the ordinary legislative and the amending processes in so far as cl.(2) of Aft. 13 is concerned, because both being laws in their true character, come within the prohibition created, by that, clause against the State and that the Directive Principles cannot be invoked to destroy Fundamental Rights.
I proceed now to examine whether the English and Amercan precedents lay down any principle applicable to amendments of our Constitution.
In, Britain the question whether a constitutional amendment is valid or not at arise because the courts are powerless ' Parliamentary Sovereignty under the English Constitution means that Parliament enjoys the right to make or unmake any law whatever and no person or body has any right to question the legislation.
The utmost and absolute despotic power belongs to Parliament.
It "make, confirm, enlarge, restrain, abrogate, repeal, revise and expand law concerning matters of all possible denominations".
What Parliament does, no authority on earth can undo.
The The Queen, each House of Parliament the constituencies and the law courts have in the past claimed independent legislative powers but these claims are unfounded.
It is impossible to compare the Indian Parliament with the Brittsh Parliament as the former con codedly in the ordinary legislation is subject to judicial review, both on the ground of competence arising from a federal structure And the existence of Fundamental Rights.
The question of competence in the matter of amendment of the Constitution depends upon, firstly, compliance with the procedure laid down in article 368 and, secondly, upon the question whether,the.process is in 871 any manner restricted by the Fundamental Rights.
Such questions cannot obviously arise in the British Parliament( ').
The example of the Constitution of the United States cannot also serve any purpose although the greatest amount of support was sought to be derived from the decisions of the Supreme Court and the institutional writings in the United States.
The power of amend in the United States Constitution flows from article V. (1).
It must be noticed that the power is clearly not made equal to ordinary legislative process.
One salient point of difference is that the President is nowhere in ' this scheme because his negative does not run.
( ') The amendment is thus not of the same quality as ordinary legislation.
The Supreme Court of the United States has no doubt brushed aside objections to amendments of the Constitution on the score of incompetence, but has refrained from giving any reasons.
In the most important of them, which questioned the 18th Amendment, the Court only stated its conclusions.
After recalling the texts of the Article under which Amendments may be made and of the 18th Amendment proposed by the Congress in 1917 and proclaimed as ratified by the States in 1919, the Court announced : "4.
The prohibition of the manufacture, sale, trans portation, importation, and exportation of intoxicating liquors for beverage purposes, as embodied in the 18th amendment, Is within the power to amend reserved by article 5 of the Constitution." (emphasis supplied) (4) One would have very much liked to know why this proposition was laid down in the terms emphasised above if the effective exercise of the.
power depended upon a particular procedure which was immaculately followed.
The silence of the Court about its reasons has been noticed in the same judgment by Mr. Justice (1) Dicey gives three supposed limitations on the power of Parliament.
Of these one that language has been used in Acts of Parliament which implies that one Parliament can make laws which cannot be touched by any subsequent Parliament, is not true.
The best examples are Act of treaties with Scotland and Ireland but these same Acts have been amended later.
Francis Bacon found this claim to be untenable.
See Dicey 'The Law of the Constitution pp. 64, 65.
(2) Article V.
The Congress, whenever two thirds of both houses shall deem it necessary, shall propose amendments to this Constitution, or, on the application of the legislatures of two thirds of the several States, shall call a convention for proposing amendments, which, in either case, shall be valid to all intents and purposes, as part of this Constitution, when ratified by the legislatures of three fourths of the several States, or by conventions in three fourths thereof, as the one or the other mode of ratification may be proposed by the Congress, provided that no amendment which may be made prior to the year ' one thousand eight hundred and eight shall in any manner affect the first and fourth clauses in the ninth section of the first article; and that no State, without its consent, shall be deprived of its equal suffrage in the Senate." (3) Hollingsworth vs Virginia ; (4) National Prohibition Cases; , 872 Mckenna.
In feser vs Garnett(1) the Court was hardly more expressive.
The only question considered by the Court was "The first contention is that the power of amendment conferred by the ' Federal Constitution, and sought to be exercised, does not dxtend to this Amendment, because of its character." (emphasis supplied).
This was repelled by Brandeis, J on behalf of the unanimous court on the grx)und that the Amendment was in character and phraseology similar to the 15th Amendment and was adopted by following the same method.
As the,lsth Amendment had been accepted for half a century the suggestion that it was not in accordance with law, but as a war measure validated by acquiescence was not accepted.
It is significant, however, that at the time of the 18th Amendment, the arguments were (a) that 'amendment ' was ' limited to the correction of error in the framing of the Constitution, (b) Article V did not comprehend the adoption of additional or supplementary provisions, (c) ordinary legislation could not be embodied.
in the constitutional amendment, and (d) Congress could not 'propose amendment which pared the sovereign power of the States.
None of these at I guin ents was accepted.
At the time of the 19th Amendment, which increased the franchise in the States, the narrow ground was that a State which had not ratified the Amendment would be, deprived of its equal suffrage in the Senate because its representatives in that body would be persons not of its choosing, i.e. persons,chosen by voters whom the State itself had not authorised to vote for Senators.
This argument was rejected.
However, in Dillion vs Gloss(2) the Supreme Court held that Congress had the, power to a time limit for ratification because article V implied that application must be within some reasonable time after.
the proposal".
The fixation of 7 years was held by the Court to be reasonable.
In 1939 came the case of Coleman vs Miller(3) which dealt with the Child Labour Amendment.
Such a law was earlier re jected by the Kansas Leizislature.
Later the State ratified the amendment after a lapse of 13 years by the casting vote of the Lt. Governor.
Mandamus was asked against the Secretary of Kansas Senate to erase the endorsement of ratification from its record and it was denied.
The Supreme Court of Kansas refused to review this denial on certiorari.
The Supreme Court of the United States in an opinion, in which not more than 4 Justices (1) 258 U.S. 130.
(2)256 U.S. 368.
(3) 307 U.S. 443.
873 took any particular view,.
declined to interfere.
Majority affirmed the decision of Supreme Court of Kansas.
Four Justices considered that the question was political from start to finish and three Justices that the previous rejection of the law and the extraordinary time taken to ratify were political questions.
Although the Supreme Court has scrupulously refrained from passing on the ambit of article V it has nowhere said that it will not take jurisdiction in any case involving the amending process.
(1) In Hollingsworth vs Virginia(2) the supreme Court assumed that the question was legal.
The Attorney General did not even raise an objection.
In Luther vs Borden($) the matter was finally held to be political which opinion prevailed unimpaired 'till some doubts have arisen after Baker vs Carr(4).
In the case the Court remarked "We conclude. that the non justiciability of claims resting on the guarantee clause which arises from the embodiment of questions that were thought 'Political ' can have no bearing upon the justiciability of the, equal protection claim presented in this case.
We ernphasise that it is the involvement in guarantee clause claims of the elements thought to define "political questions" and no other feature, which could render them non justiciable.
specifically, We have said that such claims are not held non justiciable because they touch matters of State governmental Organisation.
It would appear that the Equal Protection Clause was held to supply a guide for examination of apportionment methods better than the Guarantee Clause.
Although there is no clear pronouncement, a great contro versy exists whether questions of substance can ever come before the Court and whether there are any implied limitations upon the amendatory Power.
In the cases above noted, the other articles (particularly the Bill of Rights) were not read as limitations and no limitation outside the amending clause was implied.
In the two cases inwhich the express limitation of Equal suffrage Clause was involved the Court did not enter the question.
Thus the 15th and, on its strength, the 19th Amendments were upheld.
In Coleman vs Miller(5) the political question doctrine brought the support of only four Justices and in Baker vs Carr(4) the Federal, Courts were held to have jurisdiction to scrutinise the fairness of legislative apportionment, under the 14th Amendment and to take steps to assure that serious inequities were wiped out.
The (1) See Rottschaeffer: Handbook of American Constitutional Law (1939) pp.
397, 398, though the author 's opinion is that it will deny jurisdiction.
(2) ; (3) (4) ; (5) 307 U. section 443 874 courts have thus entered the political thicket '.The question of delimitation of constituencies cannot, of, course, arise before courts under our Constitution because of article 329.
Baker vs Carr(1) makes the Court sit in judgement over the possession and distribution of politcal power which is an essential part of a Constitution.
The magical formula of "political questions" is losing ground and it is to be hoped that a change may be Soon.
coming.
Many of the attacks on the amendments were the result of a misunderstanding that the Constitution Was a compact between States and that the allocation of powers was not to be changed at all.
This was finally decided by Texas vs White (2) as far back as 1869.
The main question of implied limitations has evoked a spate of writings. Bryce(s), Weaver(4), Mathews(5), Burdick(6), Willoughby(7), Willis(8), Rottshaefer(9), Orfield(10) (to name only a few) are of the opinion that there are no, implied limitations, although, as Cooley points out, "it is sometimes expressly declared what indeed is implied without the declaration that everything in the declaration of rights contained is excepted out of the general powers of Government, and all laws contrary thereto shall be void(11).
" Ex press checks there are only three.
Two temporary checks were operative till 1808 and dealt with interference with importation of slaves and the levying of a direct tax without apportionment among then States according to population.
Permanent check that now remains is equality of representation of States in the Senate.
Some writers suggest that this, check may also be removed in two moves.
By the first the Article can be, amended and by the second the equality removed.
When this happens it will be seen whether the Supreme Court invokes any doctrine such as achieving.
indirectly what cannot be done directly.
It will, of course, be completely out of place in a judgment to discuss the.
views of the several writers and so I shall confine myself to the observation of Orfield to whom again and again counsel for the State turned either for support or inspiration.
Accord.
ing to him, there are ' no implied limitations unless the Courts adopt (1) ; (2) Wall.700.
(3) The American Commonwealth Vol.
I. (4) Constitutional law and its Administration (1946).
(5) American Constitutional System (2nd Edn.) p. 43 45.
(6)The Law of the American Constitution (7th Imp.) p. 45.
(7) Tagore Law Lectures (1924).
(8)constitutionaI Law of United States (1936).
(9) Handbook of American Constitutional Law.
(10)The Amending of the Federal Constitution (11)Constitutional Limitations Vol.
I, 8th Edn.
95, 96.
875 that view and therefore no limitations on the substance of the amendments except the Equality Clause.
His view is that when Congress is in the amending process, it is not legislating but exercising a peculiar power bestowed by article V.
I have already shown that under our Constitution the amending process is a legislative process, the only difference being a special majority and the existence of article 13(2).
Orfield brushes aside the argument that this would destroy the very concept of the Union which, as Chief Justice.
Marshall had said, was indestructible.
Orfield faces boldly the question whether the whole Constitution can be overthrown by an amendment and answers yes.
But he says that the amendment must not be in violation of the Equality Clause.
This seems to be a great concession.
He makes this exception but Munro( '), who finds it difficult to conceive of an unamendable constitution suggests that it should be possible to begin with that clause and then the door to amendments would be wide open.
Of course, the Supreme, Court has not yet faced an amendment of this.
character and it has not yet denied jurisdiction to itself.
In the.
United States the Constitution works because, as observed by Willis, the Supreme Court is allowed to do " 'the work of remolding the Constitution to keep it abreast with new conditions and new times, and to allow the agencies expressly endowed with the; amending process to act only in extraordinary emergencies or when, the general opinion disagrees with the opinion of the Supreme Court.
" In our country amendments, so far have bean made only with the object of negativing the Supreme Court,decisions, but more of it later.
I have referred to Orfield although there are greater names than his expounding the same views.
I have refrained from referring to the opposite view which in the words of Willoughby has been "strenuously argued by reputable writers" although Willis discourteously referred to them in his book.
My reason for not doing so is plainly this.
The process of amendment in the United States is clearly not a legislative process and there is no provision like article 13 (2) under which "laws" abridging or taking away Fundamental Rights can be declared void.
Our liberal Constitution has given to the Individual all that he should have freedom of speech, of association, of assembly, of religion, of motion and locomotion, of property and trade and profession.
In addition it has made the State incapable of abridging or taking away these rights to the extent guaranteed, and has itself shown how far the enjoyment of those rights can be curtailed.
It; has given a guaranteed right 'to the person affected to move the Court. , I le guarantee is worthless if the rights are capable of being taken away.
This makes our Constitution unique and the American precedents cannot be of much assistance.
(1) The Govenment of the United States (5th Edn.) p. 77.
876 The Advocate General of Madras relied upon Vedel.(1) According to Vedel, a prohibition in the Constitution against its own amendment has a political but not juridical value, and from the juridical point of view, a declaration of absolute constitutional immutability cannot be imagined.
The constituent power being supreme, the State cannot be fettered even by itself.
He notices, however, that the Constitution of 1791 limited the power of amendment (revision) for a certain time and that of 1875 prohibited the alteration of the Republican form of Govermment.
He thinks that this hindrance can be removed by a two step amendment.
He concludes that the constituent of today cannot bind the nation of tomorrow and no Constitution can prohibit its amend Of course, the French have experimented with over a dozen Constitutions, all very much alike, while the British have slowly changed their entire structure from a monarchical executive to an executive from Parliament and have reduced the power of the House of Lords.
Cambell Bannerman former Prime Minister of England summed up the difference to Ambassador M. de Fleurian thus : ".
Quand nous faisons une Revolution, nous ne ditruisons pas notre maison, nous en conservons avec soin la facade, et, derriere cette facade, nous reconstruisons une nouvelle maison.
Vous, Francais, agissez autrement; vous jetez bas le vieil edifice et vous reconstruisez la mime maison avec une autre facade et sous un nom different." (When we make a Revolution we do not destroy an house, we save with care the facade and behind construct a new house.
You, Frenchmen, act differently.
You throw down the old edifice and you reconstruct the same house with a different facade and under a different name).
M.de Fleurian agreed that there was a lot of truth in it (ll ya du vrai dans cette boutade) (2).
But of course to a Frenchman brought up in a legal system in which the Courts do not declare even an ordinary statute to be invalid, the idea of the unconstitutionality of a constitutional amendment does not even occur.
France and Belgium have created no machinery for questioning legislation and rely on moral and political sanctions.
Even an English lawyer and less so an American lawyer find it difficult to understand how the legality of an amendment of the Constitution can ever be questioned.
It (1) Mannual Elementaire da Droil Constitutional (Sirey) p. 117.
(2) Recounted by M. de Fleuriau in the Preface to J. Magnan de Bornier, L 'Empire Britannique, son evolution politique et constitutionnelle p. 6, quoted in Wheare: The Statute of Westminster and Dominion status, P. 9 10.
877 appears to them that the procedure for the amendment being gone through there is no one to question and what emerges is the Constitution as valid as the old Constitution and just as binding.
The matter, however, has to be looked at in this way.
Where the Constitution is overthrown and the Courts lose their position under the old Constitution, they may not be able to pass on the validity of the new Constitution.
This is the, result of a revolution pure and simple.
Where the new Constitution is not accepted and the people have not acquiesced in the change and the courts under the old Constitution function, the courts can declare the new Constitution to be void.
Perhaps even when the people acquiesce and a new Government comes into being, the courts may still declare the new Constitution to be invalid but only if moved to do so.
It is only when the courts begin to function under the new Constitution that they cannot consider the vires of that Constitution because then they owe their existence to it.
I agree with Or field in these observations taken from his book.
He, however, does not include amendments of the Constitution in these remarks and expressly omits them.
His opinion seems to indicate that in the case of amendments courts are completely free to see that the prescribed constitutional mode, of alteration is complied with and the alteration is within the permissive limits to which the Constitution wishes the amendments to go.
This is true of all amendments but particularly of an amendment seeking to repeal the courts ' decision and being small in dimension, leaves the courts free to consider its validity.
The courts derive the power from the existing terms of the Constitution and the amendment fails if it seeks to overbear some existing restriction on legislation.
What I have said does not mean that Fundamental Rights are not subject to change or modification.
In the most inalienable of such rights a distinction must be made between possession of a right and its exercise.
The first is fixed and the latter controlled by justice and necessity.
Take for example article 21 : "No person shall be deprived of his life or personal liberty except according to procedure established by law".
Of all the rights, the right to one 's life, is the most valuable.
This article of the Constitution, therefore, makes.
the right fundamental.
But the inalienable right is curtailed by a murderer 's conduct as viewed under law.
The deprivation, when it takes place, is not of the right which was immutable but of the continued exercise of the right.
Take a Directive Principle which is not enforceable at law but where the same result is reached.
The right to employ ment is a directive principle.
Some countries even view it as a Fundamental Right.
The exercise, however, of that right must depend upon the capacity of Society to afford employment to all 878 and sundry.
The possession of this right cannot be confused with its exercise.
One right here is positive and can be enforced although its, exercise can be curtailed or taken away, the other is a right which, the State must try to give but which cannot be enforced.
The Constitution permits a curtailment of the exercise of most of the Fundamental Rights by stating the limits of that curtailment.
But this power does not permit the, State itself, to take away or abridge the right beyond the limits set by the Constitution.
It must also be remembered that the rights of one% individual are often opposed by the rights of another individual and thus also become limitative.
The Constitution in this way" permits the Fundamental Rights to be controlled in their exercise but prohibits their erasure.
It is argued that such approach makes Society static and robs the State of its sovereignty.
It is submitted that it leaves revolution as the holy alternative if change is necessary.
This is not right.
The whole Constitution is open to amendment only two dozen articles are outside the reach of article 368.
That too because the Constitution has made them fundamental.
What is being suggested by the counsel or the State is itself a revolution, because as things are that method of,amendment is illegal.
There is a legal method.
Parliament must act in a different way reach the Fundamental Rights.
The State must reproduce the power which it has chosen to put under a restraint.
Just as the French or the Japanese,etc.
cannot change the articles of their Constitution which are, made free, from the power of amendment and ' must call a convention or a constituent body, so also we ' India cannot abridge or take away the Fundamental Rights by the ordinary amending process.
Parliament must amend article 369 to convoke another Constituent Assembly pass a law under item 97 of the First List of Schedule VII to call a Constituent Assembly and then that assembly may be able to abridge or take away the Fundamental Rights if desired.
It cannot be done otherwise.
The majority in Sajjan Singh 's case(1) suggested bringing article 32 under the Proviso to improve protection to the Fundamental Rights.
Article 32 does not stand in need of this Protection.
To abridge or take away that article (and the same is true of all other Fundamental Rights) a constituent body and not a constituted body is required.
Parliament today is a constituted body with powers of legislation which include amendments of the Constitution by a special majority but only so far as article 13 (2) allows.
To bring into existence a constituent body is not impossible as, I had ventured to suggest during the hearing and which I have now more fully explained here.
It may be said that.
this is not necessary because article 368 can be amended by Parliament to confer on itself constituent powers over the Fundamental Rights.
This would he wrong and against article 13 (2).
Parliament cannot.
increase its (1) ; 879 powers in this way and do indirectly which it is intended not to de.
directly.
The State does not lose its sovereignty.
but as it has chosen.
to create, self imposed restrictions through one constituent body those restrictions cannot be ignored by a constituted body which makes laws.
Laws so made can affect those parts of the Constitution which are outside the restriction in article 13 (2) but any 'law (legislative or mendatory) passed by such a body must conform to that article.
To be able to abridge, or take away the Fundamental Rights which give so many assurances and guarantees a fresh Constituent Assembly must be, convoked.
Without such action the protection of the Fundamental Rights must remain immutable and any attempt to abridge or take them away in any other way must be regarded as revolutionary.
I shall now consider the amendments of the Fundamental Rights made since the adoption of the Constitution, with a view to illustrating my meaning.
Part III is divided under different headings.
They are (a), General (b) Right to Eqility (c) Right to Freedom (d) Right against exploitation (e) Right to Freedom of Religion (f) Cultural and Educational Rights (g) Right to Property (h) Right to Constitutional Remedies.
I shall first deal with amendments of topics other than the topic (g) Right to Property. 'The articles which are amended in the past are Art 15 & and 19 by the 1st Amendment (18th June 1951) and Art, 16 by the 7th Amendment (19th October 1956).
The 16th Amendment added the words "the sovereignty and integrity of India to some clauses.
As that does not abridge or take away any Fundamental Right, I shall not refer to the 16th Amendment hereafter.
That Amendment was valid.
The changes so made may be summarized.
In article 15, which deals with.
prohibition or discrimination on the ground of religion, race, caste, sex or place of birth, clause (3) allowed the State to make special provision for women and children.
A new clause was added which reads: "(4) Nothing in this article or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes".
It is argued by counsel for the State that by lifting the ban to make special provision for backward classes of citizens, there is discrimination against the higher classes.
This is the view which classes in a privileged position who had discriminated against the backward ,classes for centuries, might indeed take.
But I cannot accept this contention.
The Constitution is intended to secure to all citizens "Justice, social, economic and political and Equality of status and opportunity" (vide the Preamble) and the Directive Principles include article 38 which provides: 880 .lm15 "38 The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life." To remove the effect of centuries of discriminatory treatment and to raise the down trodden to an equal status cannot be regarded ,as discriminatory against any one.
It is no doubt true that in State of Madras vs Champakam(1) the reservation of seats for Backward Classes, Scheduled Castes and Tribes in public educational institutions was considered invalid.
Articles 16(4) and 340 had already provided for special treatment for these backward ,classes and article 46 had provided that the State shall promote, with special care their educational and economic interests.
With all ,due respects the question of discrimination hardly arose because in view of these provisions any reasonable attempt to raise the status of the backward classes could have been upheld on the principle of classification.
In any event, the inclusion of this clause to article 16 does not abridge or take away any one 's Fundamental Rights unless the view be taken that the backward classes for ever must remain backward.
By the First Amendment the second and the sixth clauses of article 19 were also amended.
The original cl.
(2) was substituted by a new clause and certain words were added in clause (6).
The changes may be seen by comparing the unamended and the amended clauses side by side : "19( 1) All citizens shall have the right (a) to freedom of speech and expression; (2) (Before Amendment) (After Amendment) Nothing in sub clause (a) of clause (1), Nothing in sub clause (a) of clause (1)shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to libel, slander, defamation, contempt of Court or any matter which offends against decency or morality or which undermines the security or tends to overthrow, the State.
shall affect the operation of any existing law, or prevent the State from making any law.
in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interest of the. security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence, The amendment was necessary because in Romesh Thapar v State of Madras(2) it was held that disturbances of public tranquallity did not come within the expression "undermines the secu (1)[1951]S.C.R.525.
(2) ; 881 rity of the State".
Later the Supreme Court itself observed in the State of Bihar vs Shailabala Devi(1) that this Court did not intend to lay down that an offence against public order could not in any case come within that expression.
The changes related to (a) "friendly relations with foreign States", (b) "public order" and (c) "incitement to an offence" and the words ."undermines the security of the State or tends to, overthrow the State".
were replaced by the words "in the interests of the security of the State".
This change could be made in view of the existing provisions of the clause as the later decision of this Court above cited 'clearly show that "public order" and "incitement to offence" were already comprehended.
The amendment was within the permissible limits as it did not abridge or take away any Fundamental Right.
The Amending Act passed by Parliament also included a sub section which read "(2) No law in force in the territory of India, immediately before the commencement of the Constitution which is consistent with the provisions of article 19 of the Constitution as amended by sub section (1) of this section shall be deemed to be void, or ever to have become void, on the ground only that being a law which takes away or abridges the right conferred by sub clause (a) of clause ( I ) of the said article, its operation was not saved by clause (2) of that article as originally enacted.
Explanation.
In this sub section, the expression "law in force" has the same meaning as in clause (1) of article 1 3 of this Constitution".
This sub section was not included in the Constitution.
That device was followed in respect of certain State statutes dealing with property rights by including them in a now Schedule.
It did not then occur to Parliament that the laws could be placed.
under a special umbrella of constitutional protection.
Perhaps it was not considered ' necessary because article 19(2) was retrospectively changed, and the, enactment of this sub section was an ordinary legislative action.
If the amendment had failed, the second subsection of section 3 would not have availed at all.
Tuming now to clause (6), we may read the original and the amended clause side by side "19(1) All citizens shall have the right= (g) to practise any profession, or to carry on any occupation, trade or business.
(1) ; 882 (6) (Before, Amendment) Nothing, in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular nothing in the said sub clause, shall affect the operation of any existing law in so far as it prescribes or empowers any authority to prescribe, or prevent the State from making any law prescribing or empowering any authority to prescribe, the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business.
(After Amendment) Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause, shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, (i)the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or (ii)the carrying on by the State, or a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise, The first change is in the verbiage and is not one of substance.
It only removes some unnecessary words.
The new sub clause is innocuous except where it provides for the exclusion of citizens.
It enables nationalisation of industries and trade.
Sub clause (g) (to the generality of which the original clause (6) created some exceptions) allowed the State to make laws imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the sub clause.
A law creating restrictions can, of course, be made outside the Constitution or inside it.
If it was considered that this right in the state was required in the interests of the general public, then the exercise of the right to practise profession or to carry on an occupation, trade or business could be suitably curtailed.
It cannot be said that nationalisation is never in the interest of the general public.
This amendment was thus within the provision for restricting the exercise of the Fundamental Right in sub cl.
(g) and was perfectly in order.
The Seventh Amendment introduced certain words in article 16 (3). 'no clauses may be, compared: " 16.
(3) (Before Amendment) Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under any State specified in the First Schedule or any local or other authority within its territory, any requirement as to residence within the 'State prior to such employment or appointment.
(After Amendment) Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local authority within, a State or Union territory, any requirement as to residence within that State or Union territory prior to such employment or appointment.
" 883 The change, is necessary to include a reference to Union territory.
It has no breaking upon Fundamental Rights., and, neither abridges nor, takes away any of them.
In the result none of the, amendments, of the article.
in parts other than that dealing with Right to property is, outside the amending process because article 13(2) is in no manner breached.
This brings me, to the main question in this case,, It is whether the amendments of the part Right to Property in Part, III of the Constitution were legally made or not.
To understand this part of the case I must first begin by discussing what property rights mean and how they were safeguarded by the Constitution as it was originally framed.
"Right to Property"in Part III was originally the subject of one article, namely, article 31.
Today there are three articles 3 1, 3 1 A and 31 B and the Ninth Schedule.
The original thirty first article read: "31 Compulsory acquisition of property.
(1) Nov person shall be deprived of his property save by authority of law.
(2) 'No property, movable or immovable, including any interest in or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principle on which, and the manner.
in which, the compensation is, to be determined and given.
No such law as is referred to in clause.
(2) made by the Legislature of the State shall have effect unless such law, having been reserved for the consideration of the President, has received his assent.
(4) If any Bill pending at the commencement of this Constitution in the Legislature of a State has, 'after it has been passed by such Legislature, been reserved for the consideration of the President and has received his assent, then, notwithstanding anything in this constitution, the law so assented to shall not be Called in question in any, court on the ground that it contravenes the provisions of clause (2).
(5) Nothing in clause(2) shall affect (a) the provisions of any existing law other than a law to which the provisions of clause (6) apply,.or 884 (b) the provisions of any law which the State may hereafter make (i) for the ,purpose of imposing or levying any tax or penalty, or (ii) for the promotion of public health or the prevention of danger to life or property, or (iii) in pursuance of any agreement entered into between the Government of the Dominion of India or the Government of India and the Government of .
any other country, or otherwise, with respect to property declared by law to be evacuee property.
(6) Any law of the State enacted not more than eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the President for his certification; and thereupon, if the President by public notification so certifies, it shall not be called in question in any court on the ground that it contravenes the provisions of clause (2) of this article or has contravened the provisions of sub section (2) of section 299 of the Government of India, Act, 1935".
The provisions of this article are intended to be read with article 19(1) (f) which reads "19(1) All citizens shall have the right (f) to acquire, hold and dispose of property".
Article 19 1 ) (f ) 'is subject to clause (6) which I have already set out elsewhere and considered.
Ownership and exchange of property are thus recognised by the article.
The word "property" is is not defined and I shall presently consider what may be included in 'property '.
Whatever the nature of property, it is clear that by the first clause of article 3 1 the right to property may be taken away under authority of law.
This was subject to one condition under the original article 3 1, namely, that the law must either fix the compensation for the deprivation or specify the principles on which and the manner in which compensation was to, be determined and given.
This was the heart of the institution 'of property as understood by the Constituent Assembly.
The rest of the article only gave constitutional support against the second clause, to legislation already on foot in the States.
This created a Fundamental Right in property.
The question may now be 885, asked,:why was it necessary to make such a Fundamental Right at all ? There is no natural right in property and as Burke said in his Reflections, Government is not made in virtue of natural rights, which may and do exist in total independence of it.
Natural rights embrace activity outside the status of citizen.
Legal rights are required for free existence as a social being and the State undertakes to protect them.
Fundamental Rights are those rights which the State enforces against itself.
Looking at the matter briefly but historically, it may be said that the Greeks were not aware of these distinctions for as Gierke(1) points out they did not distinguish between personality as a citizen and personality as a human being.
For them the Individual was merged in the citizen and the citizen in the State.
There was personal liberty and private law but there was no sharp division between the different kinds of laws.
The Romans evolved this gradually not when the Roman Republic existed, but when the notion of a Fiscus developed in the Empire And the legal personality of the Individual was separated from his membership of the State.
It was then that the State began to recognize the rights of the Individual in his dealings with the State.
It was Cicero(2) who was the first to declare that the ' primary duty of the Governor of a State was to secure to each individual in the possession of his property.
Here we may see a recognition of the ownership of property as a Fundamental Right.
This idea wasso engrained in early social philosophy that we find Locke opining in his Civil Government ' (Ch. 7) that "Government has no other end but the preservation of property".
The concepts of liberty, equality and religious freedom were well known.
To them was added the concept of property rights.
Later the list included "equalitas, libertas ius securitatis, ius defensionis and ius puniendi.
The concept of property right gained further support from Bentham and Spencer and Kant and Hegel(3).
The term property in its pristine meaning embraced only land but it soon came to mean much more.
According to Noyes(4)_ "Property is any protected right or bundle of rights (interest or thing) with direct, or indirect regard to any external object (i.e. other than the person himself) which is material or quasi material (i.e. a protected ,process) and which the then and there Organisation of Society permits to be either private or public, which is connoted by the legal concepts of occupying, possessing or, using".
(1) Das Doutscheg Genossenschaftrecht (III, 10).
(2) De Off.
(The Offices) It Ch.
XXI (Everyman) p. 105.
(3) W. Friedman:Legal Theory (4th Edn.) see pp.
373 376.
(4) The Institution of Property (1936) p. 436. L3Sup CI/67 11 886 The right is enforced by excluding entry or interference by a per.
son not legally entitled.
The position of the State vis a vis the individual is the subject of articles 19 and 31, 31 A and 31 B. Now in the enjoyment, the ultimate right may be an interest which is connected to the object through a series of intermediaries in which each 'holder ' from the last to the first 'holds of ' 'the holder ' before him.
Time was when there was a lot of 'free property ' which was open for appropriation.
As Noyes( ') puts it, "all physical manifestations capable of being detected, localised and identified" can be the objects of property.
One exception now made by all civilized nations is that humanbeings are no longer appropriable.
If any free property was available then it could be brought into possession and ownership by mere taking.
It has been very aptly said that all private property is a system of monopolies and the right to monopolise lies at the foundation of the institution of property.
Pound( ) in classifying right in rem puts private property along with personal integrity [right against injury to life, body and health (bodily or mental), personal liberty (free motion and locomotion)], Society and control of one 's family and dependents.
An extremely valuable definition of ownership is to be found in the Restatement of the Law of Property where it is said : "It is the totality of rights as to any specific objects which are accorded by law, at any time and place, after deducting social reservations".
This is the core from which some rights may be detached but to which they must return when liberated.
The right to property in its primordial meaning involved the acquisition, of 'a free object by possession and conversion of this possession into ownership by the protection of State or the ability to exclude interference.
As the notion of a State grew, the right of property was strong or we according to the force of political opinion backing it or the legislative support of the State.
The English considered the right as the, foundation of society.
Blackstone(&) explained it on religious; and social ground% claiming universality for it and called it the right of the English people.
William ' Paley(4),although he thought the institution paradoxical and unnatural found it full of advantage and Mackintosh in his famous diatribe against the French Revolution described it as the "sheet anchorof society".
This in"stitution ' appeared in the Magna Carta, in the American Declaration of Independence and the French Declaration of Rights of Man.
Later we find it in many (1) The Institution of Property (1936)p.
(2) Readings; p. 420. 3) Commentaries.
(4) Moral Philosophy.
887 Constitutions described as Fundamental, general and guaran teed(1).
Our Constitution accepted the theory that Right of Property is a fundamental right.
In my opinion it was an error to place it in that category.
Like the original article 16 of the Draft Bill of the Constitution which assured freedom of trade, commerce and intercourse within the territory of India as a fundamental right but was later removed, the right of property should have been placed in a different chapter.
Of all the fundamental rights it is the weakest.
Even in the most democratic of Constitutions, (namely, the West German Constitution of 1949) there was a provision that lands, minerals and means of production might be socialised or subjected to control.
article 31, if it contemplated socialization in the same way in India should not have insisted so plainly upon payment of compensation.
Several speakers warned Pandit Nehru and others of the danger of the second clause of article 31, but it seems that the Constituent Assembly was quite content that under it the Judiciary would have no say in the matter of compensation.
Perhaps the dead hand of section 299 of the Constitution Act of 1935 was upon the Constituent Assembly.
Ignored were the resolutions passed by the National Planning Committee of the Congress (1941) which had advocated the co operative principle for exploitation of land, the Resolution of 1947 that land with its mineral resources and all other means of production as well as distribution and exchange must belong to and be regulated by the Community, and the warning of Mahatma Gandhi that if compensation had to be paid we would have to rob Peter to pay Paul(2) In the Constituent Assembly, the Congress (Which wielded the majority then, as it does today) was satisfied with the Reprt of the Congress Agrarian Reforms Committee 1949 which declared itself in favour of the elimination of all intermediaries between the State and the tiller and imposition of prohibition against subletting.
The Abolition Bills were the result.
Obviously the Sardar Patel Committee on Fundamental Rights was not prepared to go far.
In the debates that followed, many amendments and suggestions to alter the draft article protecting property, failed.
The attitude was summed up by Sardar Patel.
He conceded that land would be required for public purposes but hopefully added : "not only land but so many other things may have to be acquired.
And the State will acquire them after paying compensation and not expropriate thenm".
(3) (1) Under the Constitution of Norway the rights (Odels and Asaete rights) cannot be abolished but if the State requires the owner must surrender the property and he is compensated.
(2) Gandhi : Constituent Assembly Debates Vol.
IX pp.
1204 06.
(3) Patel : Constituent Assembly Debates Vol.
I p. 517.
888 What was then the theory about Right to Property accepted by the Constituent Assembly ? Again I can only describe it historically.
Grotius(1) had treated the right as acquired right (ius quaesitum) and ownership (dominium) as either serving individual interests (vulgare) or for the public good (eminens).
According to him, the acquired right had to give way to eminent domain (ex vi auper eminentis dominii) but there must be public interest (publicautilitas) and if possible compensation.
In the social contract theory also .
the contract included protection of property with recognition of the power of the ruler to act in the public interest and emergency.
Our constitutional theory treated property rights as inviolable except through law for public good and on payment of compensation.
Our Constitution saw the matter in the way of Grotius but overlooked the possibility that just compensation may.
not be possible.
It follows almost literally the German jurist Ulrich Zasius (except in one respect) : Princeps non potest auferee mihi rem mean sive iure gentium, sive civile sit facta mea.
All would, have been well if the Courts had construed Article 31 differently.
However, the decisions of the High Courts and the Supreme Court, interpreting and expounding this philosophy took a different view of compensation.
I shall refer only to some of them.
, First the Patna High Court in.
Kameshwar vs Bihar(2) applied article 14 to strike down the Reforms Act in Bihar holding it to be discriminatory.
This need not have occasioned an amendment because the matter could have been righted, as indeed it wag, by,an appeal to the Supreme Court [see State of Bihar vs Kameshwar(3)].The Constitution (First Amendment) Act, 1951 followed.
It left article 31 intact but added two fresh articles, articles 31 A and 31 B which are respectively headed "saving of laws providing for acquisition of estates etc." and "Validation of certain Acts and Regulations" and added a schedule (Ninth) to be read with Art 31 B naming thirteen Acts of the State Legislatures.
Article 31 A was deemed always to have been inserted and article 31 B wiped out retrospectively all decisions of the courts which had.
declared any of the scheduled Acts to be invalid.
The texts of these new articles may now be seen: "31A. Saving of laws providing for acquisition of estates, etc. (1) Notwithstanding anything in foregoing provisions of this Part, no law providing for the acquisition by the State of any estate or of any rights therein or for (1) Grotius : De jure Belli ac Pacis.
11 c. 2 2 (5)6. 1 c. I 6 and II c. 14 7 and 8.
(2) A.L.R. 1951 Patna 91.
(3) 889 the extinguishment or modification of any such rights shall be deemed to be void on the: ground that it is consistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.
(2) In this article, (a) the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant; (b) the expression "right" in relation to an estate shall include 'any rights vesting in a proprietor, sub proprietor, tenure holder or other intermediary and any rights or privileges in respect of land revenue." "31 B. Validation of certain Acts and Regulations.
Without prejudice to the generality of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provision of this Part, and notwithstanding any judgment, decree or order of any court or tribunal to the, contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeat or amend it, continue in force '.
" Article 31 A has been a Protean article.
It has changed its face many times.
Article 31 B has remained the same till today but the Ninth Schedule has grown.
The Constitution (Fourth Amendment) Act, 1955, took the number of the Scheduled statutes to 20 and the Constitution (Seventeenth Amendment) Act, 1964 to 64 and a so called explanation which saved the application of the Proviso in article 31 A, was also added.
The device [approved by Sankari Prasad 's case(1)] was,found so (1) ; 890 attractive that many more Acts were sought to be included but were dropped on second thoughts.
Even so, one wonders how the , The West Bengal Land Development and Planning Act and some others could have been thought of in this connection.
By this device, which can be extended easily to other spheres, the Fundamental Rights can be completely emasculated by a 2/3 majority, even though they cannot be touched in the ordinary way by a unanimousvote of the same body of men! The State Legislatures may drive a coach and pair through the Fundamental Rights and the Parliament by 2/3 majority will then put them outside the jurisdiction of the courts.
Was it really intended that the restriction against the State in articles 13(2) might be overcome by the two agencies acting hand in hand ? Article 3 1 A dealt with the acquisition by the State of an .estate ' or of any rights therein or the extinguishment or modification of any such rights.
A law of the State could do these with the President 's assent, although,it took away or abridged any of the rights conferred by any provisions of Part Ill. The words 'estate ' and 'rights in relation to an estate ' were defined.
The constitutional amendment was challenged in Sankari Prasad 's case(1) on various grounds but was upheld mainly on two grounds to which I objected in Sajjan Singh 's case(2).
I have shown in this judgment, for reasons which I need not repeat and which must be read in addition to what I said on the earlier occasion, that I disagree respectfully but strongly with the view of the Court in those two cases.
This touches the first part of the amendment which created Art.31 A.
I do not and cannot question Art.31 A because (a) it was not considered at the hearing of this case, and (b) it has stood for a long time as part of the Constitution under the decision of this Court and has been acquiesced in by the people.
If I was free I should say that the amendment was not legal and certainly not justified by the reasons given in the earlier cases of this Court.
Under the original article 31, compensation had to be paid for acquisition by the State.
This was the minimum requirement of article 31 (1) and (2) and no amendment could be made by a constituted parliament to avoid compensation.
A law made by a constituted Parliament had to conform to article 13(2) and article 31 could not be ignored.
In 1954 the Supreme Court in a series of cases drew the dis tinction between article 19(1)(f) and article 31, particularly in West Bengal vs Subodh Gopal(3), Dwarkadas Srinivas vs Sholapur Spinning Co. (4).
In State of I West Bengal vs Mrs. Bela Banerjee and Others(5), this Court held a compensation in article 31(2) meant (1) ; (2) ; (3)[1954] S.CR.
(4) ; (5) 891 just equivalent, i.e. full and fair money equivalent ' thus making the adequacy of compensation justiciable.
The Constitution (Fourth Amendment) Act, 1955 then amended both article 31 and article 31 A. Clause (2) of article 31 was substituted by "(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and other fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate".
The opening words of the former second clause were modified to make them more effective but the muzzling of courts in the matter of adequacy of the compensation was the important move.
As Basu says : "It is evident that the 1955 amendment of clause (2) eats into the vitals of the constitutional mandate to pay Compensation and demonstrate a drift from the meetings of the American concept of private Property and judicial review to which our Constitution was hitherto tied, to that of socialism.
"(1) It is appropriate to recall here that as expounded by Professor Beard (2) (whose views offended Holmes and the Times of New York but which are now being recognised after his further explanation(3) the Constitution of the United States is an economic document prepared by men who were wealthy or allied with property rights, that it is based on the concept that the fundamental rights of property are anterior to Government and morally beyond the, reach of popular majorities and that the Supreme Court of the United States preserved the property rights till the New Deal era.
The, threat at that time was to enlarge the Supreme Court but not to amend the Constitution.
It appears that the Indian Socialists charged with the idea of Marx, the Webbs, Green, Laski and others viewed property rights in a different way.
Pandit Nehru once said that he had no property sense,meaning that he did not value property at all.
The Constitution seems to have changed its property significantly.
In addition to avoiding (1) Basu : commentaries on the Constitution of India (5th Edn.) Vol.
2 p. 230.
(2) An Economic Interpretation of the United States Constitution (3) See Laski : The American democracy; Weaver : Constitutional Law, Brown: Charles Beard and the constitution; will is constitutional Law.
892 the concept of just compensation, the amendment added a new clause (2A) as follows : "(2A) Where a law does not provide for the transfer of the ownership or right to possession of, any property to the State or to a corporation owned or control led by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that ' it deprives any person of his property." This narrowed the field in which compensation was payable.
In addition to this, clause (1) of article 31 A was substituted and was deemed to be always substituted by a new clause which provided: "(1) Notwithstanding anything contained in article 13, no law providing for (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or (b) the taking over of the management of any property by the State for a limited period either in the public interest 'or in order to secure the proper management of the property, or (c) amalgamation of two or more corporations either in the public interest or in order to secure the proper management of any of the corporation, or (d) the extinguishment or modification of any rights of 'managing agents secretaries and treasurers, managing directors, directors or managers of corporations, or of any voting rights of shareholders thereof, or (e) the extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or winning, any mineral or mineral oil, or the premature termination or cancellation of any such agreement, lease or licence, shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31 Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved 893 for the consideration of the President, has received assent." In clause (2)(a) after the word 'grant ', the words "and in any State of Madras and Travancore Cochin any, Janmam right" were inserted 'and deemed always to have been inserted and in clause (2) (b) after the words 'tenure holder ' the words "raiyat, under raiyat" were inserted and deemed always to have been inserted.
Once again the reach of the State towards private property was made longer and curiously enough it was done retrospectively from the time of the Constituent Assembly and so to speak, in its name.
As to the retrospective operation of these, Constitutional amendment.
I entertain considerable doubt.
A Constituent Assembly makes a new Constitution for itself.
Parliament is not even a Constituent Assembly and to.
abridge fundamental rights in the name of the Constituent Assembly appears anomalous.
I am reminded of the conversation between apo leon and Abe .
Sieyes, the, great jurist whose ability to draw up one Constitution after another has been recognised and none of whose efforts lasted for long.
When Napoleon asked him "what has survived ?" Abe Sieyes answered "I have survived".
I wonder if the Constituent Assembly will be able to say the same thing What it had written or the, subject of property rights, appears to have been written on water.
The Fourth Amendment served to do away with the distinction made by this Court between articles 19 and 31 and the theory of just compensation.
The Fourth Amendment has not been challenged before us.
Nor was it challenged at any time before.
For the reasons for which I have declined to consider the First Amendment I refrain from considering the validity of the Fourth Amendment.
It may, however, be stated here that if I was free to consider it,, I would have found great difficulty in accepting that the constitutional guarantee could be abridged in this way.
I may say here that the method I have followed in not recon , sidering an amendment which has stood for a long time, was also invoked by the Supreme Court of United: States in Leser vs Garnett(1).
A constitution works only because of universal recognition.
This recognition may.
be voluntary or forced where people have lost liberty of speech.
But the acquiescence of the people is necessary for the working of the Constitution.
The examples of our neighbours, of Germany, of Rhodesia and others illustrates the recognition of Constitutions by acquiescence.
It is obvious that it is good sense and sound policy for the 'Courts to decline to take 'up an amendment for consideration after a considerable lapse of time when it was not challenged before, or was sustained on an earlier occasion after challenge.
(1) ; 894 It is necessary to pause here and see what the property rights have become under the repeated and retrospective amendments of the Constitution.
I have already said that the Constitution started with the concept of which, Grotius may ' be said to be the author, although his name is not particularly famous for theories of constitutional or municipal laws.
The socialistic tendencies which the amendments now manifest take into consideration some later theories about the institution of property.
When the original article 31 was moved by Pandit Jawaharlal Nehru, he had described it as a compromise between various approaches to the question and said that it did justice and equality not only to the individual but also to the community ' He accepted the principle of compensation but compensation as determined by the Legislature and not the Judiciary.
His words were "The law should do it.
Parliament should do it.
There is no reference in this to any judiciary coming into the picture.
Much thought has been given to it and there has been much debate as to where the judiciary comes in.
Eminent lawyers have told us that on a proper construction of this clause, normally speaking the judiciary should not come in.
Parliament fixes either the compensation itself or the principle governing that compensation and they should not be challenged except for one reason, where it is thought that there has been a gross abuse of the law, where, in fact, there has been a fraud on the Constitution.
Naturally the judiciary comes in to see if there has been a fraud on the Constitution or not.
"(1) He traced the evolution of property and observed that property was becoming a question of credit, of monopolies, that there were two approaches, the approach of the Individual and the approach of the community.
He expressed for the for protection of the indi vidual 's rights.(2) The attitude changed at the time of the First Amendment.
Pandit Nehru propheised that the basic problem would come before the House from time to, time.
That it has, there is no doubt, just as there is no doubt that each time the individual 's rights have suffered.
Of course, the growth of collectivist theories have made elsewhere considerable inroads into the right of property.
In Russia there is no private ownership of.
land and even in the Federal Capital Territory of Australia, the ownership of land is with the Crown and the individual can get a leasehold right only.
Justification for this is found in the fact that the State must benefit from (1) Constituent Assemembly Debates Vol.
IX pp.
1193 1195.
(2) Constituent Assembly Debates Vol.
IX p. 1135.
895 the rise in the value of land.
The paucity of land and of dwelling houses have led to the control of urban properties and creation of statutory tenancies.
In our country a ceiling is put on agricultural land held by an individual.
The Supreme Court, in spite of this, has not frustrated any genuine legislation for agrarian reform.
It has upheld the laws by which the lands from latifundia have been distributed among the landless.
It seems that as the Constitutions of Peru, Brazil, Poland, Latvia, Lethuania and Mexico contain provisions for such reforms, mainly without payment of compensation, our Parliament has taken the same road.
Of course, the modem theory regards the institution of proper on a functional basis(1) which means that property to be productive must be property distributed.
As many writers have said property is now a duty more than a right and ownership of property entails a social obligation.
Although Duguit(2), who is ahead of others, thinks that the institution of property has undergone a revolution, the rights of the Individual are not quite gone, except where Communism is firmly entrenched.
The rights are qualified but property belongs still to the owner.
The Seventeenth Amendment, however, seems to take us far away, from even this qualified concept, at least in so far as "estates" as defined by article 31 A.
This is the culmination of a process.
Previous to the Constitution (Seventeenth Amendment) Act the Constitution (Seventh Amendment) Act, 1956 had given power indirectly by altering entry No. 42 in List III.
The entries may be read side by side : "42.
(Before Amendment) (After Amendment) Principles on which compensation for Acquisition and requisitioning, of pro property acquired or requisitioned for perty.
the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given.
" This removed the last reference to compensation in respect of acquisition and requisition.
What this amendment began, the Constitution (Seventeenth Amendment) Act, 1964 achieved in full.
The Fourth Amendment had added to the comprehensive definition of 'right in relation to an estate, the rights of raiyats and under raiyats.
This time the expression 'estate ' in article 31 A was amended retrospectively by a new definition which reads: "the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to (1) See G.W. Paton : Text Book of Jurisprudence (1964) pp.
484 485.
(2) Transformations du droit prive.
896 land tenures in force in that area, and shall also include (i) any jagir, inam or muafi or other similar grant and in the States of Madras and Kerala, any janmam right; (ii) any land held under ryotwari settlement; (iii) any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans," The only saving of compensation is now to be found in the second proviso added to clause (1) of the article which reads "Provided further that, where any law makes any provision for the acquisition by the State of any estate.
and where any land comprised therein is held by a per , son under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for.
the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof.
" There is also the provision for compensation introduced indirectly in an Explanation at the end of the Ninth Schedule, in respect of the Rajasthan Tenancy Act, 1955.
By this explanation the provisions of this Tenancy Act in conflict with the proviso last last quoted are declared to be void.
The sum total of this amendment is that except for land within the ceiling,all other land can be acquired ed or rights therein extinguished or modified without compensation and No. challenge to the law can be made under articles 14, 19 or 31 of the Constitution.
The same is also true of the taking over: of 'the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property, or the amalgamation of two or more companies, or the extinguishment or modification of any rights of managing agents,, secretaries, treasurers, managing directors, directors or managers, of corporations or of any voting right, of shareholders thereof any rights by virtue of an), agreement, lease, or licence for the purpose of searching for, or winning, any mineral or mineral oil, or of the premature 897 termination.
or cancellation of any such agreement, lease or licence.
It will be noticed further that deprivation of property of any person is not to be regarded as acquisition or requisition unless the benefit of the transfer of the ownership or right to possession goes to the State or to a corporation owned or controlled by the State.
Acquisition or requisition in this limited sense alone requires that it should be for public purpose and under authority of law which fixes the compensation or lays down the principles on which and.
the manner in which compensation is to be deter mined.
and given, and the adequacy of the compensation cannot be any ground of attack.
Further still acquisition of estates and of rights therein and the taking over of property, amalgamation of corporations, extinguishment or modification of rights in companies and mines may be made regardless of articles 14, 19 and 31.
In addition 64 State Acts are given special protection from the courts regardless of therein contents which 'may be in derogation of the Fundamental Rights.
This is the kind of amendment which has been upheld in Sajjan Singh(1) case on the theory of the omnipotence of article 368.
The State had bound itself not to ' enact any law in derogation of Fundamental Rights.
Is the Seventeenth Amendment a law ? To this question my answer is a categoric yes.
It is no answer to gay that this is an amendment and; therefore; not a law, or that it is passed by a special power of voting.
It is the action of the State all the same.
The State had put restraints on itself in law making whether the laws were made without Dr. within the Constitution. it is also ' no answer to say that this Court in a Bench of five Judges on one, occasion and by a majority of 3 to 2 on another, has said the,same thing.
In a. matter of the interpretation of the Constitution this Court must,look at the functioning of the Constitution as a whole.
The rules of res indicate and stare decisis are not, always appropriate in interpreting a Constitution, particularly when article 13(2) itself declares a law to be void.
The sanctity of a former judgment is for the matter then decided .
In Plessy vs Fergusson(2), Harlan, J. alone, dissented against the "separate but equal doctrine uttering the memorable words that there was no caste and that the Constitution of the United States was 'colour blind.
This dissent made some Southern Senators to oppose his grandson (Mr. Justice John Marshall Harlan) in 1954.
It took fifty eight years for the words of Harlan, J. 's lone dissent (8 to 1) to become, the law of the united states at least in respect of segregation in the public schools [See Brown vs Board of Education(3)].
As Mark Twain (1) (1965] 1 section C. R. 933.
(2)163 U. section 537.
(3) ; 898 said very truly "Loyality to a petrified opinion never yet broke a chain or freed a human soul" I am apprehensive that the erosion of the right to property may be practised against other Fundamental Rights.
If a halt is to be called, we must declare the right of Parliament to abridge or take away Fundamental Rights.
Small inroads lead to larger inroads and become as habitual as before our freedom won The history of freedom is not only how freedom is achieved but how it is preserved.
I am of opinion that an attempt to abridge or take away Fundamental Rights by a constituted Parliament even through an amendment of the Constitution can be declared void.
This Court has the power and jurisdiction to make the declaration.
I dissent from the opposite view expressed in Sajjan Singh 's(1) case and I overrule that decision.
It remains to consider what is the extent of contravention.
Here I must make it clear that since the First, Fourth and Seventh Amendments are not before me and I have not, therefore, questioned them, I must start with the provisions of articles 31, 31 A, 31 B, List III and the Ninth Schedule as they were immediately preceding the Seventeenth Amendment.
I have elsewhere given a summary of the inroads made into property rights of individuals and Corporations by these earlier amendments.
By this amendment the definition of 'estate ' was repeated for the most part but was extended to include: "(ii) any land held under ryotwari settlement; (iii) any land held or let for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans." Further reach of acquisition or requisition without adequate compensation and without a challenge under articles 14, 19 and 31 has now been made possible.
There is no kind of agricultural estate or land which cannot be acquired by the State even though it pays an illusory compensation.
The only exception is the second proviso added to article 31 A(1) by which, lands within the ceiling limit applicable for the time being to a person personally cultivating his land, may be acquired only on paying compensation at a rate which shall not be less than the market value.
This may prove: to be an illusory protection.
The ceiling may be lowered by legislation.
The State may leave the person an owner in name and acquire all his.
other rights.
The latter question did come before this Court in two cases Ajit Singh vs State of Punjab (2) (1) (1965] 1 & C. R. 933 (2) ; 899 and Bhagat Ram and Ors.
vs State of Punjab, and Ors.
(1) decided on December 2, 1966.
My brother Shelat and, I described the device as a fraud upon this proviso but it is obvious that a law lowering the ceiling to almost nothing cannot be declared a fraud on the Constitution.
In other words, the agricultural landholders hold land as tenants at will.
To achieve this a large number of Acts of the State Legislatures have been added to the Ninth Schedule to bring them under the umbrella of article 31 B.
This list may grow.
In my opinion the extension of the definition of 'estate ' to include ryotwari and agricultural lands is an inroad into the Fundamental Rights but it cannot be questioned in view of the existence of article 31 A(1) (a) as already amended.
The constitutional amendment is a law and article 31 (I) permits the deprivation of property by authority of law.
The law may be made outside the Constitution or within it.
The word 'law ' in this clause includes both ordinary law or an amendment of the Constitution.
Since "no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31", the Seventeenth Amendment when it gives a new definition of the word 'estate cannot be questioned by reason of the Constitution as it exists.
The new definition of estate introduced by the amendment is beyond the reach of the courts not because it is not law but because it is "law" and falls within that word in article 31 (1) (2) (2 A) and article 31 A(1).
1, therefore, sustain the new definition, not on the erroneous reasoning in Sajjan Singh 's case (2 ) but on the true construction of the word 'law ' as used in articles 13(2), 31(1)(2 A) and 31 A(1).
The above reason applies a fortiori to the inclusion of the proviso which preserves (for the time being) the notion of compensation for deprivation of a cultural property.
The proviso at least saves something.
It prevents the, agricultural lands below the ceiling from being appropriated without payment of pro per compensation.
It is clear,that the proviso at least cannot be held to abridge or take away fundamental rights.
In the result I uphold the second section of the Constitution (Seventeenth Amendment) Act, 1964.
This brings me to the third section of the Act.
That does no more than add 44 State Acts to the Ninth Schedule.
The object of article 31 B, when it was enacted, was to save certain State Acts notwithstanding judicial decision to the contrary.
These Acts were already protected by article 31.
One can with difficulty understand such a provision.
Now the Schedule is being used to (1) 11967] 2 section C. R. 165.
(2) ; 900 give advance protection to legislation which is known appre hended to derogate from the Fundamental Rights.
The power under article 368, whatever it may be, was given to amend the Constitution.
Giving.
protection to statutes of State Legislatures which offend the Constitution in its most fundamental part, can hardly merit the description amendment of the Constitution in fact in so cases it is not even known whether the statues in question stand in need of such aid.
The intent is to silence the courts and not to amend the Constitution.
If these Acts were ', not included in the Schedule they would have to face the Fundamental Rights and rely on articles 31 and 31 A to save them.
By this device protection far in excess of 'these articles is afforded to them.
This in my judgment is not a matter of amendment at all.
The power which is given is for the specific purpose of amending the Constitution and not to confer validity on State Acts against the rest of the Constitution.
If the President 's assent did not do this, no more would this section.
I consider section 3 of the Act., to be invalid as an illegitimate exercise of the powers .
of amendment however generous.
Ours is the only Constitution in the world which carries a long list of ordinary laws which it protects against itself,.
In the result I declare section 3 to be ultra vires the amending process.
As stated by me in Sajjan Singh 's case(1) article 368 outlines process, which if followed strictly results in the amendment of the Constitution.
The article gives power to no particular person or persons.
All the named authorities have to act according to the letter of the article to achieve the result.
The procedure of, amendment, if it can be called a 'power at all is a legislative power but it is sui generi and outside the three lists in Schedule 7 of the Constitution. 'It does 'not ' have to depend.
upon any entry,in the lusts.
Ordinarily there would be no limit to the extent of the , amendatory legislation but.
the Constitution itself makes distinctions.
It states three methods and places certain bars.
For some amendments an ordinary, majority fs sufficient; for some others 'a 2/3rd majority of the, members present and voting with a majority of the total members, in each House is necessary: and for some others in addition to the second requirement, ratification by at least one,half of the legislatures of the States must be forthcom ing.
Besides these methods, article 13(2) puts an embargo on the legislative power of the State and consequently upon the agencies of the State.
By its means the boundaries of legislative action of any of including legislation to amend the Constitution have been marked out.
(1) [1965]1 S.C.R 933.
901 I have attempted to show hem that under our Constitution revolution is not the only alternative to change of Constitution under article 368.
A Constitution can. be changed by consent or, revolution Rodee, Anderson and Christol (1) have shown the sovereignty of the People is either electoral or constituent.
When the People elect the Parliament and the Legislatures they exercise their electoral sovereignty.
I includes some constituent sovereignty also but only in so far as conceded.
The remaining constituent sovereignty which is contained in the Preamble and Part III is in abeyance because of the curb placed by the People on the state under article 13(2).
It is this power which can be reproduced.
I have indicated the method.
Watson(2) quoting Ames On Amendments p. 1 note 2) points out that the idea that provision should be made in the instrument of Government itself for the method of its amendment is peculiarly American.
But even in the Constitution of the United States of America some matters were kept away from the amendatory process Other temporarily or permanently.
Our Constitution has done the same .
Our Constitution provides for minorities, religions, socially and educationally backward peoples, for ameliorating the condition of depressed classes, for removing class distinctions, titles, etc.
This reservation was made so that in the words of Madison(3), men of factious tempers, of local prejudices, or sinister designs may not by intrigue, by corruption, or other means , first obtain the suffrages and then betray the interests of the people.
It was to plug the loophole such as existed in section 48 of the Weimar Constitution( 4) that article 13 (2) was.
adopted.
of course, as.
Story( ' ') says, an amendment process is a safety valve to, let off all temporary effervescence and excitement, as an effective instrument to control and adjust the Movements of the machinery when out of order or in danger of self d tion but is not an open valve to let, out ' even that which was intended to be retained.
In the words of Wheare(6) the people or a Constituent Assembly acting on their behalf, has authority to enact a Constitution and by the same token a portion of the Constitution placed outside the amenditory process by one Constituent body can only be amended by another Constituent body.
In the Commonwealth of, Australia Act the provisions of the last Paragraph of section 128 have been regarded as, mandatory, and held to be clear limitations of the power of amendment.
Dr. Jethro Brown considered that the amendment of the paragraph was logically impossible even by a two step amendment.
Similarly, section 105 A has been judicially (1) Introduction to Political Science, p. 32 et seq.
(2) Constitution" Its History, Application and Construction Vol.
II (1910) p. 1301.
(3) Federalist No. 10.
(4) See Louis L. Snyder: The Weimar Constitution, p. 42 et seq.
(5) Commentaries on the Constitution of the United States (I 833) Vol.
(6) K. C. Wheare: Modern Constitutions, p. 78.
sup Cl/67 12 902 considered in the Garnishee case( ') to be an exception to the power of amendment in section 128 although Wynes(2) does not agree.
I prefer the judicial view to that of Wynes.
The same position obtains under our Constitution in article 35 where the opening words, are more than a non obstante clause.
They exclude article 368 and even amendment of that article under the proviso.
It is, therefore, a grave error to think of article 368 as a code ;Dr as omnicompetent.
It is the duty of this Court to find the limits which the Constitution has set on the amendatory power and to enforce those limits.
This is what I have attempted to do in this judgment.
My conclusions are (i) that the Fundamental Rights are outside the amendatory process if the amendment seeks to abridge or take away any of the rights; (ii) that Sankari Prasad 's case (and Sajjan Singh 's case which followed it) conceded the power of amendment over Part III of the Constitution on an erroneous view of articles 13(2) and 368; (iii) that the First, Fourth and Seventh Amendments being part of the Constitution by acquiescence for a long time, cannot now be challenged and they contain authority for the Seventeenth Amendment; (iv) that this Court having now laid down that Fundamental Rights cannot be abridged or taken away by the exercise of amendatory process in article 368, any further inroad into these rights as they exist today will be illegal and unconstitutional unless it complies with Part III in general and article 13(2) in particular, (v) that for abridging or taking away Fundamental Rights, a Constituent body will have to be, convoked; and (vi) that the two impugned Acts, namely, the Punjab Security of Land Tenures Act, 1953 (X of 1953) and the Mysore Land Reforms Act, 1961 (X of 1962) as amended by act XIV of 1965 are valid under the Constitution not because they are included in schedule 9 of the Constitution but because the, are protected by article 31 A, and the President 's assent.
(1) ; (2) Legislative, Executive and Judicial Powers in Australia pp.
695 698.
903 In view of my decision the several petit ions will be dismissed, but without costs.
The State Acts Nos.
21 64 in the Ninth Schedule will have to be tested under Part HI with such protection as articles 31 and 31 A give to them.
Before parting with this case I only hope that the Fundamental Rights will be able to withstand the pressure of textual readings by "the depth and toughness of their roots".
Bachawat, J The constitutionality of the Constitution First, Fourth and Seventeenth Amendment Acts is challenged on the . ground that the fundamental rights conferred by Part HI are inviolable and immune from amendment.
It is said that article 368 does not give any power of amendment and, in any event, the amending power is limited expressly by article 13(2) and impliedly by the language of article 368 and other articles as also the preamble.
It is then said that the power of amendment is abused and should be subject to restrictions.
The Acts are attacked also on the ground that they made changes in articles 226 and 245 and such changes could not be made without complying with the proviso to article 368.
Article 31 B is subjected to attack on several other grounds.
The constitutionality of the First Amendment was upheld in Sri Sankari Prasad Singh Deo vs Union, of India and State of Bihar(1), and that of the Seventeenth amendment, in Sajjan Singh is that these cases were Part XX of the Constitution specifically provides for its amendment.
It consists of a single article .
Part XX is as follows "PART XX.
Amendment of the Constitution Procedure for amendment of the Constitution 368.
An amendment of this Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two thirds of the members of that House present and voting, it shall be presented to the President for his assent and upon such assent being given to the Bill the Constitution shall stand amended in accordance with the terms of the Bill : Provided that if such amendment seeks to make any change in (a) article 54.
article 55, article 73, article 162 or (1) ; (2) ; 1196712 S.C.IL 904 (b) Chapter IV of Part V, Chapter V of Part VI, or Chapter 1 of Part XI, or (c) any of the Lists in the Seventh Schedule, or (d) the representation of States in Parliament, or (e) the provisions of this article, the amendment shall also require to be ratified by the Legislatures of not less than one half of the States by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent.
" The contention that article 368 prescribes only the procedure of amendment cannot be accepted.
The article not only prescribes the procedure but also gives the power of amendment.
If the procedure of art.368 is followed, the Constitution "shall stand amended" in accordance with the terms of the bill.
It is because the power to amend is given by the article that the Constitution stands amended.
The proviso is enacted on the assumption that the several articles mentioned in it are amendable.
The object of the proviso is to lay down a stricter procedure for amendment of the articles which would otherwise have been amendable under the easier procedure of the main part.
There is no other provision in the Constitution under which these articles can be amended.
Articles 4, 169, Fifth Schedule Part D, and Sixth Schedule Para 21 empower the Parliament to.
pass laws amending the provisions of the First, Fourth, Fifth and Sixth Schedules and making amendments of the Constitution consequential on the abolition or creation of the legislative councils in States, and by express provision no such law is deemed to be an amendment of the Constitution for the purposes of article 368.
All other provisions of the Constitution can be amended by recourse to article 368 only.
No other article confers the power of amending the Constitution.
Some articles are expressed to continue until provision is made by law [see articles 59(3), 65(3), 73(2), 97, 98(3), 106, 135, 142(1), 148(3), 149, 171(2), 186, 187(3), 189(3), 194(3), 195, 221(2), 283(1) and (2), 285, 313, 345, 372(1), 373].
Some articles continue unless provision is made otherwise by law [see articles 120(2), 133(3), 210(2) and some continue save as otherwise provided by law [see articles 239(1), 287].
Some articles are subject to the provisions of any law to be made [see articles 137, 146(2), 225, 229(2), 241(3), 300(1), 309], and some are expressed not to derogate from the power of making laws [see articles 5 to 11, 289(2)].
All these articles are transitory in nature and cease to operate when provision is made by law on the subject.
None of them can be regarded as conferring 905 the power of 'amendment of the Constitution.
Most of articles continue until provision is made by law made by the Parliament.
But some of them continue until or unless provision is made by the State Legislature (see articles 189 (3), 194 (3), 195, 210(2), 229(2), 300(1), 345) or by the appropriate legislature (see articles 225, 241(3)); these articles do not confer a power of amendment, for the State legislature cannot amend the Constitution.
Many of the above mentioned articles and also other articles (see articles 22(7), 32(3), 33 to 35, 139,140, 239A, 241, 245 to 250, 252, 253, 258(2), 286(2), 302, 307, 315(2), 327, 369 delegate powers of making laws to the legislature.
None of these articles gives the power of amending the Constitution.
It is said that article 248 and List 1 item 97 of the 7th Schedule read with article 246 give the Parliament the power of amending the Constitution.
This argument does not bear scrutiny.
article 248 and List I item 97 vest the residual power of legislation in the Parliament.
Like other powers of legislation, the residual power of the Parliament to make laws is by virtue of article 245 subject to the provisions of the Constitution.
No law made under the residual power can derogate from the Constitution or amend it.
If such a law purports to amend the Constitution, it will 'be void.
Under the residual power of legislation, the Parliament has no power to make any law with respect to any matter enumerated in Lists II and III of the 7th Schedule but under article 368 even Lists II and III can be amended.
The procedure for constitutional amendments under article 368 is different from the legislative procedure for passing laws under the residual power of legislation.
If a constitutional amendment could be made by recourse to the residual power of legislation and the ordinary legislative procedure, article 368 would be meaningless.
The power of amending the Con stitution is to be found in article 368 and not in article 248 and List I item 97.
Like other Constitutions, our Constitution makes express provisions for amending the Constitution.
The heading of article 368 shows that it is a provision for amendment of the Constitution, the marginal note refers to the procedure for amendment and the body shows that if the procedure is followed, the Constitution shall stand amended by the power of the article.
Chapter VIII of the Australian Constitution consists of a single section (section 128).
The heading is "Alteration of the Constitution".
The marginal note is "Mode of altering the Constitution".
The body lays down the procedure for alteration.
The opening words are : "This Constitution shall not be altered except in the following manner".
Nobody has doubted that the section gives the power of amending the Constitution.
Wynes in his book on Legislative Executive and Judicial Powers in Australia, third edition, 906 p. 695, stated "The power, of amendment extends to alteration of this Constitution ' which includes section 128 itself.
It is true that section 128 is negative in form, but the power is impled by the terms of the section.
" Article 5 of the United States Constitution provides that a proposal for amendment of the constitution by the Congress on being ratified by the three fourth of the states "shall be valid to all intents and purposes as part of this Constitution".
The accepted view is that "power to amend the Constitution was reserved by article 5", Per Van Devanter, J, in Rhode Island vs Palmer(1): Art .368 uses stronger words.
On the passing of the bill for amendment under article 368, "the Constitution shall stand amended in accordance with the terms of the bill".
Article 368 gives the power of amending "this Constitution".
This Constitution means any of the provisions of the Constitution.
No limitation on the amending power can be gathered from the language of this article.
Unless this power is restricted by some ,other provision of the Constitution, each and every part of the Constitution may be amended under article 368.
AR the articles mentioned in the proviso are necessarily within this amending power.
From time to time major amendments have been made in the articles mentioned in the proviso (see articles 80 to 82, 124 (2A),131,214,217(3),222,(k2) 224A,226(IA) 230,231,241 and Seventh Schedule) and other articles (see articles 1, 3, 66, 71, 85, 153.
158, 170, 174, 239, 239A, 240, 258A, 2,69, 280, 286, 290A, 291, 298, 305, 311, 316, 350A, 350B, 371, 371A, 372A, 376, 379 to 391, the first third and fourth schedules), and minor amendments have been made in innumerable articles.
No one has doubted so far that these articles are amendable.
Part III is a part of the Constitution and is equally amendable.
It is argued that a Constitution Amendment Act.is a law and therefore the power of amendment given by article 368 is limited by article 13(2).
, article 13(2) is in these terms: "13(1). . . . . . . (2) The State shall not make any law which takes away or abridges the tights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void." Now article 3 68 gives, the power of amending each and every provision of the Constitution article 13 (2) is a part of the Constitution and is within the reach of the amending power.
In other words art 13 (2) is subject to the overriding power of an. 368 and is controlled by it.
article 368 is not controlled by article 13 (2) and the (1) ; : ; 907 prohibitory injunction in article 13(2) is not directed against the amending power Looked at from this broad angle, article 13 (2) does not forbid the making of a constitutional amendment abridaing or taking away any right confesed by Part III.
Let us now view the matter from a narrower angle.
The con tention is that a constitutional amendment under article 368 is a law within the meaning of article 13.
1 am inclined to think that this narrow contention must also be rejected.
In article 13 unless the context otherwise provides 'law ' includes any ordinance, order, bye law, rule, regulation, notification, custom or usage having in the territory of India the force of law [article 13(3).(a)].
The inclusive definition of law in article 13 (3) (c) neither expressly excludes nor expressly includes the Constitution or a constitutional amendment.
Now the term law ' in its widest and generic sense includes the Constitution and a constitutional amendment.
But in the constitution this term is employed to designate an ordinary statute or legislative act in contradistinction to the Constitution or a constitutional amendment.
The Constitution is the basic law providing the framework of government and creating the organs for the making of the laws.
The distinction between the Constitution and the laws is so fundamental that the Constitution is not regarded as a law or a legislative act.
The Constitution means the Constitution as amended.
An amendment made in conformity with article 368 is a part of the.
Constitution and is likewise not a law.
The basic theory of our Constitution is that it cannot be changed by a law or legislative Act.
It is be cause special provision is made by articles 4, 169, Fifth Schedule Part D and Sixth Schedule para 21 that some parts of the Constitution are amendable by ordinary laws.
But by express provision no such law is deemed to be a constitutional amendment.
Save as express.1y provided in articles 4, 169, Fifth Schedule Part D and Sixth Schedule para 21, no law can amend the Constitution, and a law which purports to make such an amendment is void.
In Marbury vs Madison(1), Marshall, C.J., said: "It is a proposition too plain to be contested, that the Constitution controls any legislative Act repugnant to it; or, that the legislature may alter the Constitution by an ordinary Act.
Between these alternatives there is no middle ground.
The Constitution is either a superior paramount law, unchangeable by ordinary means, or it is on a level with (1) ; ,177:.
; , 73.
908 Ordinary legislative Acts, and, like other Acts, is alter able when the legislature shall please to alter it.
If the former part of the alternative be true, then a legislative Act contrary to the Constitution is not law; if the, latter part be true, then written constitutions are absurd attempts, on the part of the people, to limit a power in its own nature illimitable.
Certainly all those who have framed written constitutions contemplate them as forming the fundamental and paramount law of the nation, and, consequently, the theory of every such government must be, that an Act of the Legislature, repugnant to the Constitution, is void.
This theory is essentially attached to a written constitution, and is consequently to be considered, by this court, as one of the fundamental principles of our society.
" It is because a Constitution Amendment Act can amend the Constitution and is not a law that article 368 avoids all reference to law making by the Parliament.
As soon as a bill is passed in conformity with article 368 the Constitution stands amended in accordance with the terms of the bill.
The power of amending the Constitution is not an ordinary law making power.
It is to be found in article 368 and not in articles 245, 246 and 248 and the Seventh Schedule.
Nor is the procedure for amending the Constitution under article 368 an ordinary law making procedure.
The common feature of the amending process under art, 368 and the legislative procedure is that a bill must be passed by each House of Parliament and assented to by the President.
In other respects the amending process under article 368 is very different from the ordinary legislative proms.
A constitution amendment Act must be initiated by a bill introduced for that purpose in either House of Parliament.
The bill must be passed in each House by not less than two thirds of the members present and voting, the requisite quorum in each House being a majority of its total membership; and in cases coming under the proviso, the amendment must be ratified by the legislature of not less than one half of the States.
Upon the bill so passed being assented to by the President, the Constitution stands.
amended in accordance with the terms of the bill.
The ordinary legislative process is much easier.
A bill initiating a law may be passed by a majority of the members present and voting at a sitting of each House or at a joint sitting of the Houses, the quorum for the meeting of either House being one tenth of the total number of members of the House.
The bill so passed on being assented to by the President becomes a law.
A bill though passed by all the members of both Houses cannot take effect as a 909 Constitution amendment Act unless it is initiated for the express purpose of amending the Constitution.
The essence of ,a written Constitution is that it cannot be changed by an ordinary law.
But most written Constitutions Provide for their organic growth by constitutional amendments.
The main method of constitutional amendments are (1) by the ordinary legislature but under certain restrictions, (2) by the people through a referendum, (3) by a majority of all the units of a Federal State; (4) by a special convocation, see C.F. strong Modem Political institutions, 5th Edition, pp.
133 4,146.
Our Constitution hag by article 368 chosen the first and a combination of the first and the third methods.
The special attributes of constitutional amendment under article 368 indicate that it is not a law or a legislative act.
Moreover it will be seen presently that the Constitution makers could not have intended that the term "law" in article 13 (2) would include a consti tutional amendment under article 368.
If a constitutional amendment creating a new fundamental right and incorporating it in Part III were a law, it would not be open to the.
parliament by a subsequent constitution to abrogate the new fundamental right for such an amendment would be repugnant to Part ]III.
Bit the conclusion is absurd for.
the body which created the right can surely take it away by the same process.
Shri A. K. Sen relied upon a decision of the Oklahoma Supreme Court in Riley vs Carter(1) where it was held that for some purposes the Constitution of a State was one of the laws of the State.
But even in America, the term "law ' does not ordinary include the Constitution or a constitutional amendment in this connection, I will read the following passage in Corpus Juris Secundum, Vol, XVI Title Constitutional Law article .lm15 "The term 'constitution ' is ordinarily employed to designate the organic law in contradistinction to the term law, which is generally used to designate statutes Or legislative enactments.
Accordingly the term 'law. ' under this distinction does not include a constitutional amendment.
However, the term "law ' may, in accordance with the context in which it is used, comprehend or included the constitution or a constitutional provision or amendment.
A statute and a constitution, although of unequal dignity,, are both 'laws ', and rest on the will of the people." (1) 88 A:A.L.R. 1008.
910 In our Constitution, the expression "law" does not include either the constitution or a constitutional amendment.
For all these reasons we must hold that a constitutional amendment under article 368 is not a law within the meaning of article 13 (2).
I find no conflict between articles 13(2) and 368.
The two articles operate in different fields.
article 13(2) operates on laws; it makes no express exception regarding a constitutional amendment, because a constitutional amendment is not a law and is outside its purview.
article 368 occupies the field of constitutional amendments.
It does not particularly refer to the, articles in Part III and many other articles, but on its true construction it gives the power of amending each and every provision of the Constitu tion and necessarily takes in Part III.
Moreover, article 368 gives the power of amending itself, and if express power for amending the provisions of Part III were needed, such a power could be taken by an amendment of the article.
It is said that the non obstante clause in article 35 shows that the article is not amendable.
No one has amended article 35 and the point does not arise.
Moreover, the non obstante clause is to be found in articles 258(1), 364, 369, 370 and 371A.
No one has suggested that these articles are not amendable.
The next contention is that there are implied limitations on the amending power.
It is said that apart from article 13 (2) there are expressions in Part III which indicate that the amending power ,cannot touch Part III.
Part III is headed " fundamental rights".
The right to move the Supreme Court for enforcement of the rights conferred by this Part is guaranteed by article 32 and cannot be suspended except as otherwise provided for by the Constitution (article 32(4)).
It is said that the terms "fundamental" and "guarantee" indicate that the rights conferred by Part HI are not amendable.
The argument overlooks the dynamic character of the Constitution.
While the Constitution is static, it is the fundamental law of the country, the rights conferred by Part III are, fundamental, the right under article 32 is guaranteed, and the principles of State policy enshrined in Part IV are fundamental 'm the governance of the country.
But the Constitution is never at rest; it changes with the progress of time.
article 368 provides the means for the dynamic changes in the Constitution.
The scale cf values embodied in Parts III and IV is not immortal.
Parts III and IV being parts of the Constitution are not immune from amendment under article 368.
Demands for safeguards of the rights embodied in Part III and IV may be traced to the Constitution of India Bill 1895, the Congress Resolutions between 1917 and 1919, Mrs. Beasan 's Commonwealth of India Bill of 1925, the Report of the Nehru Committee set up under the Congress Resolution in 1927, the Congress 911 Resolution of March.
1931 and the Sapru Report of 1945.
The American bill of rights,the constitutions of other countries the declaration of human rights by the United Nations and other declarations and charters gave impetus to the demand.
In this background the Constituent Assembly embodied in preamble to the Constitution the resolution to secure to all citizens social, economic and political justice, liberty of thought, expression, belief, faith and worship, equality of status and opportunity and fraternity assuring the dignity of the individual and the unity of the nation and incorporated safeguards as to some human rights in Parts III and IV of the Constitution after separating them into two parts on the Irish model.
Part III contains the passive obligations of the State.
It enshrines the right of life, personal liberty, expression, assembly, movement, residence, avocation, property, culture and education, constitutional remedies, and protection against exploitation and obnoxious penal laws.
The State shall not deny these rights save as provided in the Constitution.
Part IV contains the active obligations of the State.
The State shall secure a social order in which social, economic and political justice shall inform all the institutions of national life.
Wealth and its source of production shall not be concentrated in the hands of the few but shall be distributed so as to subserve the common good, and there shall be adequate means of livelihood for all and equal pay for equal work.
The State shall endeavour to secure the health and strength of workers, the right to work, to education and to assistance in cases of want, just and humane conditions of work, a living wage for workers, a uniform civil code, free and compulsory education for children.
The State shall take steps to organize village panchayats, promote the educational and economic interests of the weaker sections of the people, raise the level of nutrition and standard of living, improve public health.
organize agricultural and animal husbandry separate the judiciary from executive and promote international peace and security.
The active obligations of the State under Part IV are not justiciable.
If a law made by the State in accordance with the fundamental directives of Part IV comes in conflict with the fundamental rights embodied in Part II the law to the extent of repugnancy is void.
Soon after the Constitution came into force, it became apparent that laws for agrarian and other reforms for implementing the directives of Part IV were liable to be struck down as they infringed the provisions of Part III.
From time to time constitutional amendments were proposed with the professed object of validating these laws, superseding certain judicial inter pretations of the Constitution and curing defects in the original Constitution.
The First, Fourth, Sixteenth and Seventeenth Amendments made important changes in the fundamental rights.
The First amendment introduced cl.
(4) in article 15 enabling the State to make special provisions for the benefit of the socially and 912 educationally backward class of citizens, the,scheduled castes and the scheduled tribes in derogation of articles 15 and 29,(2) with a view to implement article 46 and to supersede the decision in State of Madras vs Champakam(1), substituted a new cl.
(2) in article 19 with retrospective effect chiefly with a view to be in public order within the permissible restrictions and to supersede the decisions in Romesh Thappar vs State of Madras( '), Brij Bhushan vs State of Delhi( '),, amended cl.
(6) of article 19 with a view to free state trading monopoly from the test of reasonable ness and to supersede the decision in Moti Lal vs Government of State of Uttar Pradesh().
Under the stress of the First amendment it is now suggested that Champakam 's case( '), Romesh Thappar 's case( ') and Motilal 's(4) case were wrongly decided, and the amendments of articles 15 and 19 were in harmony with the original Constitution and made no real change in it.
It is to be, noticed however that before the First amendment no attempt was made to overrule these cases, and but for the amendments, these judicial interpretations of the Constitution would have continued to be the law of the land.
The Zamindari Abolition Acts were the subject of bitter attack by the zamindars.
The Bihar Act though protected by cl. 6 of article 31 from attack under article 31 was struck down as violative of article 14 by the Patna High Court (see the State of Bihar vs Maharajadhiraj Sri Kameshwar Singh(5), while the Uttar Pradesh Act (see Raja Surya Pal Singh vs The State.
of U.P.) (6) and the Madhya Pradesh Act (see Visweshwar Rao vs State.of Madhya Pradesh (7), though upheld by the High Courts were under challenge in this Court.
The First amendment therefore introduced article 31A, 31B and the Ninth Schedule with a view to give effect to the policy of agrarian reforms, to secure distribution of large blocks of land in the hands of the zamindars in conformity with article 39, and to immunize specially 13 State Acts form attack under Part Ill. The validity of the First Amendment was upheld in Sri Sankari Prasad Singh Deo 's case(8).
The Fourth amendment changed article 31(2) with a view to supersede the decision in State of West Bengal vs Bela Banerjee(9) and to provide that the adequacy of compensation for property compulsorily acquired would not be justiciable, inserted Cl.
(2A) in article 31 with a view to supersede the decisions in the State of West Bengal vs Subodh Gopal Bose("), Dwarka Das Shrinivas vs Sholapur Spinning and Weaving Co., Ltd.,("), (1) ; (2) ; (3) ; (4) I.L.R. [1951] 1 All.
(5) 1951 Pat. 91).
(6) (1952] S.C.R. 1056 (A.I.R. 1961).
(7) All. 674.) (8) ; (9) ; (10) 11954] S.C.R. 587.(11) ; 913 Saghir Ahmad vs The State of Uttar Pradesh,(1) and to make it clear that clauses (1) and (2) of article 31 relate to different subject ' matters and a deprivation of property short of transference of ownership or right to possession to the State should not be treated as compulsory acquisition of property.
The Fourth amendment also amended article 31A with a view to protect certain laws other than agrarian laws and to give effect to the policy of fixing ceiling limits on land holdings and included seven more Acts in the Ninth Schedule.
One of the Acts (item 17) though upheld in Jupiter General Insurance Co. vs Rajgopalan(2) was the subject of criticism in Dwarka Das 's case (3 ) .
The Sixteenth amendment amended clauses (2), (3) and (4) of article 19 to enable the imposition of reasonable restrictions in the interest of the sovereignty and integrity of India.
The Seventeenth amendment amended the definition of estate in article 31A with a view to supersede the decisions in Karimbil Kunhikoman vs State of Kerala (4 ) and A. P. Krishnaswami Naidu vs State of Madras( ') and added a proviso to article 31A and included 44 more Acts in the Ninth Schedule, as some of the Acts had been struck down as unconstitutional.
The validity of the Seventeenth amendment was upheld in Sajjan Singh 's case( ').
Since 1951, numerous decisions of this Court have recognised the validity of the First, Fourth and Seventeenth amendments.
If the rights conferred by Part III cannot be abridged or taken away by constitutional amendments, all these amendments would be invalid.
The Constitution makers could not have intended that the rights conferred by Part TIT could not be altered for giving effect to the policy of Part TV.
Nor was it intended that defects in Part III could not be cured or that possible errors in judicial interpretations of Part III could not be rectified by constitutional amendments.
There are, other indications in the Constitution that the fundamental rights are not intended to be inviolable.
Some of the articles make express provision for abridgement of some of the fundamental rights by law (see articles 16(3), 19(1) to (6), 22(3), 23(2), 25(2), 28(2), 31(4) to (6), 33, 34).
Articles 358 and 359 enable the suspension of fundamental rights during emergency.
Likewise, article 368 enables amendment of the Constitution including all the provisions of Part Ill. It is argued that the preamble secures the liberties grouped together in Part III and as the preamble cannot be amended, Part III is not amendable.
The argument overlooks that the preamble is mirrored in the entire Constitution.
, If the rest of the Constitution is amendable, Part III cannot stand on a higher (1) [1954) S.C.R. 1218.
(3) ; ,706.
(5) ; (2) A.I.R. 1952 Pun.
(4) [1962] Supp.
I S.C.R. 829.
(6) ; 914 control the unambiguous language of the articles of the Constitution, see ' Wynes, Legislative Executive and Judicial Powers in Australia third edition, pp.
694 5; in Re Berubari Union & Exchange of Enclaves(").
The last case decided that the Parliament can under article 368 amend article 1 of the Constitution so as to enable the cession of a part of the national territory to a foreign power, The Court brushed aside the argument that "in the transfer of the areas of Berubari to Pakistan the fundamental rights of thousands of persons are involved.
" The case is an authority for the proposition that the Parliament can lawfully make a con stitutional amendment under article 368 authorising cession of a part of the national territory and thereby destroying the fundamental rights of the citizens of the Effected territory, and this power under article 368 is not limited by the preamble.
It is next argued that the people of India in exercise of their sovereign power have placed the fundamental rights beyond the reach of the amending power.
Reliance is place on the following passage in the judgment of Patanjali Sastri, J., in A. K. Gopalan V.
The State of Madras(2): "There can be no doubt that,the people of India have, in exercise of their sovereign will as expressed in the Preamble, adopted the democratic ideal which assures to the citizen the dignity of the, individual and other cherished human values as a means to the full evolution and expression of his personality, and in delegating to the Legislature the executive and the Judiciary their respective powers in the Constitution, reserved to themselves certain fundamental rights, so called, I apprehend, because they have been retained by the people and made, paramount to the delegated powers, as in the American Model.
" I find nothing in the passage contrary to the view unequivocally expressed by the same learned Judge in Sri Sankari Prasad Singh Deo 's(3) case that the fundamental rights are amendable.
The power to frame the Constitution was vested in the Constituent Assembly by section 8 (1 ) of the Indian Independence Act, 1947. 'The Constitution though legal in its origin was revolutionary in character and accordingly the Constituent Assembly exercised its powers of framing the Constitution in the name of the people.
The objective resolution of the Assembly passed on January 22, 1947 (1) ,261 2,281 (2)[1950] S.C.R. 88, 98.
(3) (1952] S.C.R. 89.
915 solemnly declared that all power and authority of sovereign independent India, its constituent parts, and organs and the Government were derived from the people.
The preamble to the Constitution declares that the people of India adopts, enacts and gives to themselves the Constitution.
In form and in substance the Constitution emanates from the people.
By the Constitution.
the people constituted themselves into a republic.
Under the republic all public power is derived from the people and is exercised by functionaries chosen either directly or 'indirectly by the people.
The Parliament can exercise only such powers as are delegated to it under the Constitution.
The people acting through the Constituent Assembly reserved for themselves certain rights and liberties and ordained that they shall not be curtailed by ordinary legislation.
But the people by the same Con stitution also authorised the Parliament to make amendments to, the Constitution.
In the exercise of the amending power the Parliament has ample authority to abridge or take away the fundamental rights under Part III.
It is urged that the word 'amend ' imposes the limitation that an amendment must be an improvement of the Constitution.
Reliance is placed on the dictum in Livermore vs E. C. Waite(1): "On, the other hand, the significance of the term 'amendment ' implies such an addition or change within the lines of the original instrument as will effect an improvement, or better carry out the purpose for which it was framed." Now an attack on the eighteenth amendment of the U.S. Constitution based on this passage was brushed aside by the U.S. Supreme Court in the decision in the National Prohibition(2) case.
The decision totally negatived the contention that "an amendment must be confined in its scope to, an alteration or improvement of that which is already contained in the Constitution and cannot change its basic structure, include new grants of power to the Federal Government nor relinquish, in the State those which already have been granted to it", see Cooley on Constitutional Law, Chapter III article 5, pp.
46 & 47.
1 may also read a passage from Corpus Juris Secundum Vol.
XVI, title 'Constitutional Law, p. 26 thus : "The term 'amendment a , used in the constitutional article giving Congress a power of proposal includes additions to, as well as corrections of, matters.
already treated, and there is nothing there which suggests that it is used in a restricted sense.
" Article 368 indicates that the term "amend" means "change".
The proviso is expressed to apply to amendments which seek to make any "change" in certain articles.
The main part of article 368 (1) (2) Rhode Island vs Palmer 253 U.S. 350 : 64 L. ed.
947, 960, 978.
916 thus gives the power to amend or to make changes in the Constitution.
A change is not necessarily an unprovement.
Normally the change is made with the object of making an improvement, but the experiment may fail to achieve the purpose.
Even the plain dictionary meaning of the word "amend" does not support the contention that an amendment must take an improvement, see Oxford English Dictionary where the word "amend" is defined thus : "4. to make professed improvements (in a measure before Parliament); formally to alter 'in detail, though practically it may be to alter its principle so as to thwart it.
" The 1st, 4th, 16th and.
17th Amendment Acts made changes in Part III of the Constitution.
All the changes are authorized by article 368.
It is argued that under the amending power, the basic features .,of the Constitution cannot be amended.
Counsel said that they could not give an exhaustive catalogue of the basic features, but sovereignty, the republican form of government the federal structure and the fundamental rights were some of the features.
The Seventeenth Amendment has not derogated from the sovereignty, ,the republican form of government and the federal structure, and 'the question whether they can be touched by amendment does not arise for decision.
For the purposes of these cases, it is sufficient to say that the fundamental rights are within the reach of the amending power.
It is said that in the course of the last 16 years there have been numerous amendments in our Constitution whereas there have been very few amendments of the American Constitution during 'the last 175 years.
Our condition is not comparable with the American.
The dynamics of the social revolution in our country may require more rapid changes.
Moreover every part of our Constitution is more easily amendable than the American.
Alan Gledhill in his book "The Republic of India", 1951 Edition, pp. 74 & 75 , said: "The Indian Founding, Fathers were less determined than were their American predecessors to impose rigidity on their Constitution. . . .
The Indian Constitution assigns different degrees of rigidity to its different parts, but any part of it can be more easily amended than the American Constitution.
" It is said that the Parliament is abusing its power of amendment by making too many frequent changes.
If the Parliament 'has the power to make the amendments, the choice of making any particular amendment must be left to it.
Questions of policy cannot be debated in ' this Court.
The possibility of, abuse of a power is not the test of its existence.
In Webb vs Outrim(1) lord (1) 917 Hobhouse said, "If they find that on the due construction of the Act a legislative power falls within section 92, it would be quite wrong of them to deny its existence because by some possibility it may be abused, or limit the range which otherwise would be open to the Dominion Parliament".
With reference to the doctrine of implied prohibition against the exercise of power ascertained in accordance with ordinary rules of construction, Knox C.J., in the Amalgamated Society of Engineers vs The Adelaide Steams Company Limited and others(1) said, "It means the necessity of protection against the aggression of some outside and possibly hostile body.
:It is based on distrust, lest powers, if once conceded to the least degree, might be abused to the point of destruction.
But possible abuse of powers is no reason in British law for Emiting the natural force of the language creating them The historical background in which the Constitution was framed shows that the ideas embodied in Part III were not intended to be immutable.
The Constituent Assembly was corn of representatives of the provinces elected by,the members of the lower houses of the provincial legislatures and representatives of the Indian States elected by electoral colleges constituted by the rules.
The draft Constitution was released on February 26, 1948While the Constitution was on the anvil it was envisaged the, future Parliaments would be elected on the basis of adult suffrage.
Such a provision was later incorporated in article 326 of the Constitution.
In a special article written on August 15, 1948, Sir B., N. Rau remarked: "It seems rather illogical that a constitution should be settled by a simple majority by an assembly elected indirectly on a very limited franchise and that it should not be capable of being amended in the same way by a Parliament elected and perhaps for the most Part elected directly by adult suffrage", (see B. N. Rau ' India 's Constitution in the making, 2nd Edition p. 394).
The conditions in India were rapidly changing and the country was in a state of flux politically and economically.
Sir B. N. Rau therefore recommended that the Parliament should be empowered to amend the Constitution by its ordinary law making process for at least the first five years.
Earlier, para 8 of the Suggestions of the Indian National Congress of May 12, 1946 and para 15 of the Proposal of the Cabinet Mission of May 16, 1946 had recom mended similar powers of revision by the Parliament during the initial years or at stated intervals.
The Constituent Assembly did not accept these recommendations.
On September 17, 1949 an amendment (No. 304) moved by Dr. Deshmukh providing (1) ; ,151.
Cf/67 13 918 for amendment of the Constitution at any time by a clear majority in each house of Parliament was negatived.
The Assembly was conscious that future Parliaments, elected on the basis of adult suffrage would be more representative, but they took the view that article 368 provided a sufficiently flexible machinery for amending all part , of the Constitution.
The Assembly never entertain the proposal that any part of the Constitution including Part III should be beyond the reach of the, amending power.
As a matter of fact, Dr. Deshmukh proposed an amendment (No. 212) habiting any amendment of the rights with respect to property or otherwise but on September 17, 1949 he withdrew this proposal (we Constituent Assembly Debates Vol.
IV pp.
1 642 43).
The best exposition of the Constitution is that which it has received from contemporaneous judicial decisions and enactments.
We find a rare unanimity of view among Judges and legislators from the very commencement of the Constitution that the fundamental rights are within the reach of the amending power.
No one in the Parliament doubted this proposition when the Constitution First Amendment Act of 1951 was passed.
It is remarkable that most of the members of this Parliament were also.
members of the Constituent Assembly.
In, section Krishnan and Others vs The state of Madras(1), a case decided on May 7, 1951 Bose, J. said: "My concept of a fundamental right is something which Parliament cannot touch save by an amendment of the Constitution".
, In Sri Sankari Prasad Singh Deo 's case(2), decided on October 5, 1951, this Court expressly decided that fundamental rights could be abridged by a constitutional amendment.
This view was acted upon in all the subsequent decisions and was reaffirmed in Sajjan Singh 's case(3).
Two learned Judges then expressed some doubt but even they agreed with the rest of the Court in upholding the validity of the amendments.
A static system of.
laws is the worst tyranny that any constitution can impose upon a country.
An unamendable constitution means that all.
reform and progress are at a standstill.
If Parliament cannot amend Part III of the Constitution even by recourse to article 368, no other power can do so.
There is no, provision in the Constitution for calling a convention for its revision or for submission of any proposal for amendment to the referendum.
Even if power to call a convention or to submit a proposal.
to the refere be taken by amendment of article 368, Part III.
would sip remain unamendable on the assumption that a constitutional amendment is a law.
Not even the unanimous vote of the 500 (1) ; , 652.
(2) ; (3) ; 919 million citizens or their representatives, at a special convocation could amend Part III.
The deadlock could be resolved by revolution only.
Such a consequence was not intended by the framers of the Constitution.
The Constitution is meant to endure.
It has been suggested that the Parliament may provide for another Constituent Assembly by amending the Constitution and that Assembly can amend Part III and take away or abridge "the fundamental rights.
Now if this proposition is correct, a suitable amendment of the Constitution may provide that the Parliament will be the Constituent Assembly and there upon the Parliament may amend Part III.
If so, I do not see why under the Constitution as it stands now, the Parliament cannot be regarded as a recreation of the Constituent Assembly.
for the special purpose of making a constitutional amendments under article 368, and why the amending power cannot be regarded a a constituent power as was held in Sri Sankari Prasad Singh Deo 's (1) case.
The contention that the constitutional amendments of Part III had the effect (I changing articles 226 and 245 and could not be passed without complying with the proviso to article 368 is not tenable; A constitutional amendment which does not profess to amend article 226 directly or by inserting or striking words therein cannot be regarded as seeking to make, any change in it and thus falling within the constitutional inhibition of the proviso.
article 226 gives power to the High Court throughout the territories in relation to which it exercises jurisdiction to issue to any person or authority within those territories directions, orders and Writs for the enforcement of any of the rights conferred by Part III and for any purpose The Seventeenth Amendment made no direct change in article 226.
It made changes in Part In and abridged or took away some of the rights conferred by that Part.
As a result of the changes, some of those rights no longer exist and as the High Court cannot issue writs for the enforcement of those rights its power under article 226 is affected incidentally.
But an alteration in the area of its territories or in the number of persons or authorities within those territories or in the number of enforceable rights under Part III or other rights incidentally affecting the Power of the High Court under article 226 cannot be regarded as an ' amendment of that article.
article 245 empowers the Parliament and the Legislatures of, the States to make laws subject to the provisions of the Constitution.
This power to make laws is subject to the limitations imposed by Part M.
The abridgement of the rights conferred by Part III by the Seventeenth Amendment necessarily enlarged the scope of the legislate power, and thus affected article 245 indirectly.
But the Seventeenth amendment made no direct change in article 145 and did not amend it.
(1) ; 920 Art 3 1B retrospectively validated the Acts mentioned in the Ninth Schedule notwithstanding any judgment decree or order of any court though they take away or abridge the rights conferred by Part Ill. It is said that the Acts are still bom and cannot be validated.
But by force of article 31B the Acts are deemed never to have become void and must be regarded as valid from their inception.
The power to amend the Constitution carries with it the power to make a retrospective amendment.
It is Said that article 3 1B amends article 141 as it alters the law declared by this Court on the validity of the Acts.
This argument is baseless.
As the Constitution is amended retrospectively, the basis upon which the judgments of this Court were pronounced no longer exists, and the law declared by this Court can have no application.
It is said that article 3 1B is a law with respect to land and other matters within the competence of the State Legislature, and the Parliament has no power to enact such a law.
The argument is based on a misconception.
The Parliament has not passed any of the Acts mentioned in the Ninth Schedule.
article 3 IB removed the constitutional bar on the making of the Acts.
Only the Parliament could remove the bar by the Constitution amendment.
It has done so by article 3 1 B.
The Parliament could amend each article in Part III separately and provide that the Acts would be protected from attack under each article.
Instead of amend ing each article separately, the Parliament has by article 3 1 B made a comprehensive amendment of all the articles by providing that the Acts shall not be deemed to be void on the ground that they are inconsistent with any of them.
The Acts as they stood on the date of the Constitution Amendments are validated.
By the last part of article 31B the competent legislatures will continue to the power to repeal or amend the Acts.
The subsequent repeals and amendments are not validated.
If in future the competent legislature passes a repealing or amending Act which is inconsistent with Part III it will be void.
I have, therefore, coma to the conclusion that the First, Fourth, Sixteenth and Seventeenth Amendments are constitutional and am not void.
If so, it is common ground that these petitions must be For the last 16 years the validity of constitutional amendments of fundamental rights have been recognized by the people and all the organs of the government 'including the legislature, the judiciary and the executive.
Revolutionary, social and economic changes have taken place on the strength of the First, Fourth and Seventeenth Amendments.
Even if two views were possible on the question of, the validity of the amendments, we should not now reverse our previous decisions and pronounce them to be invalid.
Having heard lengthy arguments on the question I have 921 come to the conclusion that the validity of the constitutional amendments was rightly upheld in Sri Sankari Prasad Singh Deo 's(1) and Sajjan Singh 's(2) cases and I find no reason for over ruling them.
The First, Fourth and Seventeenth amendment Acts are sub jected to bitter attacks because they strike it the entrenched property rights.
But the abolition of the zemindari was a necessary reform.
It is the First Constitution Amendment Act that made this reform possible.
No legal argument can restore the outmoded feudal zemindari system.
What has been done cannot be undone.
The battle for the past is lost.
The legal argument necessarily shifts.
The proposition now is that the Constitution Amendment Acts must be recognized to be valid in the past but they must be struck down for the future.
The argument leans on the ready made American doctrine of prospective overruling.
Now the First, Fourth, Sixteenth and Seventeenth Amendment Acts take away and abridge the rights conferred by Part M.
If they are laws they are necessarily rendered void by article 13(2).
If they are void, they do not legally exist from their very inception.
They cannot be valid from 1951 to 1967 and invalid thereafter.
To say that they were valid in the past and will be invalid in the future is to amend the Constitution.
Such a naked power of amendment of the Constitution is not given to the Judges.
The argument for the petitioners suffers from a double fallacy, the first that the Parliament has no power to amend Part III so as to abridge or take away the entrenched property rights, and the second that the Judges have the power to make such an amend ment.
I may add that if the First and the Fourth amendments are valid, the Seventeenth must necessarily be valid.
It is not possible to say that the First and Fourth amendments though originally invalid have now been validated by acquiescence.
If they infringed article 13(2),t they were void from their inception.
Referring to the 19th amendment of the U.S. Constitution, Brandeis, J. said in Leser vs Garnett(3) "This Amendment is in character and phraseology precisely similar to the 15th.
For each the same method of adoption was pursued.
One cannot be valid and the other invalid.
That the 15th is valid, although rejected by six states, including Maryland, has been recognized and acted on for half a century. .
The suggestion that the 15th was incorporated in the Constitution, (1) ; (2) [1965] 1 S.C.R. 933.
(3) ; : ; , 51 1.
922 not in accordance with law, but practically as a war measure, which has been validated by acquiescence, cannot be entertained.
" Moreover the Seventeenth amendment has been acted upon and its validity has been upheld by this Court in Sajjan Singh 's case.
If the First and the Fourth Amendments are validated by acquiescence, the Seventeenth is equally validated.
Before concluding this judgment I must refer to some of the speeches made by the members of the Constituent Assembly in the course of debates on the draft Constitution.
These speeches cannot be used as aids for interpreting the Constitution.
See State of Travancore Cochin and others vs The Bombay Co. Ltd.( ' ).
Accordingly, I do not rely on them as aids to construction.
But I propose to refer to them, as Shri A K. Sen relied heavily on the speeches of Dr. B. R. Ambedkar.
According to him, the speeches of Dr. Ambedkar show that he did not regard the fundamental rights as amendable.
This contention is not supported by the speeches.
Sri Sen relied on the following passage in the speech of Dr. Ambedkar on September 17, 1949 "We divide the articles of the Constitution under three categories.
The first category is the one which consists of articles which can be, amended by Parliament by a bare majority.
The second set of articles are articles which require two thirds majority.
If the future Parliament wishes to amend any particular article .which is not mentioned in Part III or article 304, all that is necessary for them is to have two thirds majority.
They can amend it.
Mr. President : Of Members present.
Now, we have no doubt put articles in a third .category where for the purposes of amendment the .mechanism is somewhat different or double.
It requires two thirds majority plus ratification by the, States.
"(2) I understand this passage to mean that according to Dr. Am bedkar an amendment of the articles mentioned in Part.
III and 368 requires two thirds majority plus ratification by the States He seems to have assumed (as reported) that the provisions of Part III fall within the. proviso to article 368.
But he never said that part III was s not amendale.
He maintained consistently that all the articles of the Constitution are amendable under article 368 On November 4, 1948, be.
said : "The second means adopted to avoid rigidity and legalism is the provision for facility with which the (1) (1952] S.C.R. 1112.
(2) Constituent Assembly Debat Vol.
IX p. 1661.
923 Constitution could be amended.
The provisions of the Constitution relating to the amendment of the Constitution divide the Articles of the Constitution into two groups.
In the one group are placed Articles relating to (a) the distribution of legislative powers between the Centre and the States, (b) the representation of the States in Parliament, and (c) the powers of I the Courts.
All other Articles are placed in another group.
Articles placed in the second group cover a very large part of the Constitution and can be amended by Parliament by a double majority, namely, a majority of not less than two thirds of the members of each House present and voting and by a majority of the total membership of each House.
The amendment of these Articles does not require ratification by the States.
It is only in those Articles which are placed in group one that an additional safeguard of ratification by the States is introduced.
One can therefore safely sky that the Indian Federation will not suffer from the faults of rigidity or legalism.
Its distinguishing feature is that it is a flexible Federation.
The provisions relating to amendment of the Constitution have come in for a virulent attack at the hands of the critics of the Draft Constitution.
it is said that the provisions contained in the Draft make amendment difficult.
It is proposed that the Constitution should be amendable by a simple majority at least for some.
years.
The argument is subtle and ingenious.
It is said that this Constituent Assembly is not elected on adult suffrage while the future Parliament will be elected on adult suffrage and yet the former has been given the right to pass the Constitution by a simple majority while 'the latter has been denied the same right.
It is paraded as one of the absurdities of the Draft Constitution.
I must repudiate the charge because it is without foundation.
To know how simple are the provisions of the Draft Constitution in respect of amending the Constitution one has only to study the provisions for amendment contained in the American and Australian Constitutions. 'Compared to them those contained in the Draft Constitution will be found to be the simplest. 'The Draft Constitution has eliminated the elaborate and difficult procedures such as a decision by a convention or are ferenduni.
The Powers of amendments left with the Legislatures Central and Provincial.
It is only, for amendment , or specific matters and they are only few, that the ratification of the State Legislatures is required.
924 All other Articles of the Constitution are left to be amended by Parliament.
The only limitation is that it shall be done by a majority, of not less than two thirds of the members of each House present and voting and a majority of the total membership of each House.
It is difficult to conceive a simpler method of amending the Constitution."(, ') On December 9, 1948 , Dr. Ambedkar said with reference to article 32: "The Constitution has invested the Supreme Court with these rights and these writs could not be taken away unless and until the Constitution itself is amended by means left open to the legislature.
"(2) On November 25, 1949, Dr. Ambedkar strongly refuted the suggestion that fundamental rights should ' be absolute and unalterable.
He said: "The condemnation of the Constitution largely comes from two quarters, the Communist Party and the Socialist Party. .
The second thing that the Socialists want is that the Fundamental Rights mentioned in the Constitution must be absolute and without any limitations so that if their Party comes into power, they would have the unfettered freedom not merely to criticize, but also to overthrow the State. .
Jefferson, the great American statesman who played so great a part in the making of the American Constitution, has expressed some very weighty views which makers of Constitution can never afford to ignore.
In one place, he has said: 'We may consider each generation as a distinct nation, with a right, by the will of the majority, to bind themselves, but none to bind the succeeding generation, more than the inhabitants of another country.
In another place, he has said: 'The idea that institutions established for the use of the nation cannot be touched or modified, even to make them answer their end, because of rights gratuitously supposed in those employed to manage the min the trust for the public, may perhaps be a Salutary provision against the abuses of a monarch, but is most absurd against the nation itself.
Yet our lawyers and priests generally inculcate this doctrine, and suppose that preceding generations held the earth more freely than we do; had a right to impose laws on us, unalterable by ourselves, and (1) Constituent Assembly Debates Vol. 7, pp.
35 6, 43 4.
(2) Constituent Assembly Debates Vol. 7, 953. 925 that we, in the like manner, can make laws and impose burdens on future generations, which they will have no right to alter; in fine, that the earth belongs to the dead and not the living.
I admit that what Jefferson has said is not merely true, but is absolutely true.
There can be no question about it.
Had the Constituent Assembly departed from this principle laid down by Jefferson it would certainly be liable to blame, even to condemnation.
But I ask, has it? Quite the contrary.
One has only to examine the provision relating to the amendment of the Constitution.
The Assembly has not only refrained from putting a seal of finality and infallibility upon this Constitution by denying to the people the right to amend the Constitution as in Canada or by making the amendment of the Constitution subject to the fulfilment of extraordinary terms and conditions as in America of Australia but has provided a most facile procedure for amending the Constitution.
I challenge any of the critics of the Constitution to prove that any Constituent Assembly anywhere in the world has, in the circumstances in which this country finds itself, provided such a facile procedure for the amendment of the Constitu tion.
If those who are dissatisfied with the Constitution have only to obtain a 2/3 majority and if they cannot obtain even a two thirds majority in the parliament elected on adult franchise in their favour, their dissatisfaction with the Constitution cannot be deemed to be shared by the general public. '(1) On November 11, 1948, Pandit Jawahar Lal Nehru said: "And remember this, that while we want this Constitution to be as solid and as permanent a structure as we can make it, nevertheless there is no permanence in Constitutions.
There should be a certain flexibility.
If you make anything rigid and permanent, you stop a Nation 's growth, the growth of living vital organic people.
Therefore it has to be flexible.
"(2) The views of Jefferson echoed by Ambedkar and Nehru were more powerful expressed by Thomas Paine in 1791 "There never did, there never will, and there never can, exist a parliament, or any description of men, or any generation of men, in any country, possessed of the (1) Constituent Assembly Debates Vol.
I 1, pp.
975 6.
(2) Constituent Assembly Debates Vol. 7, p. 322.
926 right or the power of binding and controuling posterity to the end of time ', or of commanding for ever how the world.
shall be governed, or who shall govern it , and therefore all such clauses, acts or declarations by which the makers of them attempt to do what they have neither the right nor the power to do, nor take power to execute, are in themselves null and void.
Every age and generation must be as free to act for itself in all cases as the ages and generations which preceded it.
The vanity and presumption of governing beyond the grave is the most ridiculous and insolent of all tyrannies.
Man has no property in man; neither has any generation a property in the generations which are to follow.
The parlia ment of the people of 1688 or of any other period, had no more right to dispose of the people of the present day, or to bind or to controul them in any shape whatever, than the parliament or the people of the present day have to dispose of, bind or controul those who are to live a hundred or a thousand years hence.
Every Generation is, and must be, competent to all the purposes which its occasions require.
It is the living, and not the dead, that are to be accommodated.
When man ceases to be, his power and his wants cease with him; and having no longer any participation in the concerns of this World, he has no longer any authority in directing who shall be its governors, or how its government shall be organized, or how administered." (See 'Rights of Man ' by Thomas Paine, unabridged edition by H. B. Bonner, pp. 3 & 4).
For the reasons given above, I agree with Wanchoo, J. that the writ petitions must be dismissed.
In the result, the writ petitions are dismissed without costs.
Ramaswami, J. I have perused the judgment of my learned Brother Wanchoo, J. and I agree with his conclusion that the Constitution (Seventeenth Amendment) Act, 1964 is legally valid, but in view of the importance.of the constitutional issues raised in this case I would prefer to state, my own reasons in a separate judgment.
In these petitions which have been filed under article 32 of the Constitution, a common question arises for determination, viz.,.
whether the Constitution (Seventeenth Amendment) Act, 1964 which amends article 31 A and 3 1 B of the Constitution is ultra vires and unconstitutional, .
927 The petitioners are affected either by the Punjab Security of Land Tenures Act, 1954.
(Act X of 1953) or by the Mysore Land Reforms Act (Act 10 of 1962) as amended by Act 1 1965 which were added to the 9th Schedule of the Constitution by the impugned Act and, their contention is that the impugned Act being unconstitutional and invalid , the validity of the two Acts by which they are affected cannot be saved.
The impugned Act consists of three sections.
The first section.
gives its short title.
Section 2 (i) adds a proviso to Cl. ( 1 ) of article 3 I A after the existing proviso.
This proviso reads, thus: "Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof." Section 2(ii) substitutes the following sub clause for sub cl.
(a) of cl.
(2) of article 31 A "(a) the expression 'estate ' shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating force in that area and all to land tenures in also include (i) any jagir, inam or muafi or other similar grant and in the States of Madras and Kerala, any ianmam right; (ii) any land held under ryotwari settlement; (iii) any land held or let for purposes of agriculture or for purposes ancillary there to, including wast land, forest land, land for posture or ones of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans;" Section 3 amends the 9th Schedule by adding 44 entries to it.
In dealing with the question about the validity of the im pugned Act, it is necessary to consider the scope and effect of the provisions contained in article
368 of the Constitution, because the main controversy in the present applications turns upon:the 928 decision of the question as to what is the construction of that Article.
Article 368 reads as follows: "An amendment of this Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two thirds of the members of that House present and voting, it shall be presented to the President for his assent and upon such assent being given to the Bill, the Constitution shall stand amended in accordance with the terms of the Bill .
Provided that if such amendment seeks to make any change (a) Article 5, article 55, article, 73, article 162 or article 241, or (b) Chapter IV of Part V, Chapter V of Part VI, or Chapter I of Part XI, or (c) any of the Lists in the Seventh Schedule, or (d) the representation of States in Parliament, or (e) the provisions of this article, the amendment shall also require to be ratified by the Legislatures of not less than one half of the States by resolutions to that effect passed by those.
Legislatures before the Bill making provision for such amendment is presented to the President for assent.
" It is necessary at this stage to set out briefly the history of articles . 31 A and 31 B. These Articles were added to the Constitution with retrospective effect by section 4 of the Constitution (First Amendment) Act, 1951.
Soon after the promulgation of the Constitution, the political party in power, commanding as it did a majority of votes in the several State legislatures as well as in Parliament, carried out radical measures of agrarian reform in Bihar, may be referred to as Zamindari Abolition Acts.
Certain zamindars, feeling themselves aggrieved, attacked the validity of those Acts in courts of law on the ground that they contravened the 'fundamental rights conferred on them by Part III of the Constitution.
The High Court of Patna held that the Act passed iii Bihar was unconstitutional while the High Courts of Allahabad and Nagpur upheld the validity of the corresponding legislation in Uttar Pradesh and Madhya Pradesh respectively (See Kameshwar Uttar Pradesh and Madhya Pradesh by enacting legislation which 929 vs State of Bihar(1) and Surya Pal vs U.P. Government(1).
The parties aggrieved by these respective decisions had filed appeals by special leave before this Court.
At the same time petitions had also been preferred before this Court under article 32 by certain other Zamindars, seeking the determination of the same issues It was atstage that the Union Government, with a view to put an endall this litigation and to remedy what they considered to be certain defects brought to light in the work of the Constitution, brought forward a bill to amend the Constitution, which,.
after undergoing amendments in various particulars, was passed by the require majority as the Constitution (First Amendment) Act, 1951 by which articles 31 A and 31 B were added to the Constitution.
That was the first step taken by Parliament to assist the process of legislation to bring about agrarian reform, by introducing Articles 31 A and 31 B.
The second step in the same direction was taken by Parliament in 1955 by amending article 31 A by the Constitution (Fourth Amendment) Act, 1955.
The object of this amendment was to widen the scope of agrarian reform and to confer on the legislative measures adopted in that behalf immunity from a possible attack that they contravened ' the fundamental rights of citizens.
In other words, the amendment Protected the legislative measures in respect of certain other items of agrarian and social welfare legislation, which affected the proprietary rights of certain citizens.
At the time when the first amendment was made, article 31 B expressly provided that none, of the, Acts and Regulations specified in the 9th Schedule, nor any of the provisions thereof, shall be deemed to be void or ever to have become void on the ground that they were inconsistent with or took: away or abridged any of the rights conferred by Part III, and it added that notwithstanding any judgment, decree or order of any Court or tribunal to the contrary, each of the said Acts and Regulations shall subject to the power of any competent legislature to repeal or amend, continue in force.
At this time, 19 Acts were listed in Schedule 9, and they were thus effectively validated.
One more Act was added to this list by the Amendment Act of 1955, so that as a result of the second amendment, the Schedule contained 20 Acts which were validated.
It appears that notwithstanding these amendments, certain other legislative measures adopted by different States for the purpose of giving effect to the agrarian policy of the party in power, were effectively challenged.
For instance, the Karimbil Kunhikoman vs State of Kerala(3), the validity of the Kerala Agrarian Relations Act (IV of 1961) was challenged by writ petitions filed under article 32, and as a result of the majority decision of this Court, the whole Act was struck down.
The decision of this (1) A I R. 1951 Pat. 91 (2) A.I.R. 1951 All. 674.
(3)[1962] Supp.
1 S.CR. 829. 930 Court was pronounced on December 5, 1961.
In A. P. Krishna swami Naidu vs The State of Madras(1) the constitutionality of the Madras Land Reforms (Fixation of Ceiling on Land) Act (146.
58 of 1961) was the subject matter of debate, and by the decision of this Court pronounced, on March 9, 1964, it was declared that the whole Act was invalid.
It appears that the Rajas than Tenancy Act III of 1955 and the Maharashtra Agricultural Lands (Ceiling and Holdings) Act 27 of 1961 had been similarly declared invalid, and in consequence, Parliament thought it necessary to make a further amendment in Art: 31 B so as to gave the validity of these Acts which had been struck down and of other similar Acts which were likely to be challenged.
With that object in view, the impugned Act has enacted section 3 by which 44 Acts have been added to Schedule 9.
It is therefore clear that the object of the First, Fourth and the Seventeenth Amendments of the Constitution was to help the State Legislatures to give effect to measures of agrarian reform in a broad and comprehensive sense in the interests of a very large section of Indian ,citizens whose social and economic welfare closely depends on the persuit of progressive agrarian policy.
The first question presented for determination in this case is whether the impugned Act, in so far as it purports to take away or abridge any of the fundamental rights conferred by Part III .or the Constitution,falls within the prohibition of article 13 (2) which provides that "the State, 'shall, not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall to the extent of the Contravention, be void".
In other words, the argument, of the petitioners was that the law to which Art, 13(2) applies, would include a law passed by Parliament by virtue of its constituent power to amend the Constitution, and so, its validity will have.
to be tested by article 13(2) itself.
It was contended that the State" includes Parliament within article 12 and "law" must include, a constitutional amendment.
It was said that it was the deliberate intention of the framers of the Constitution, who realised the sanctity of the fundamental rights conferred by Part III, to make them immune from interference not only by ordinary laws passed by the legislatures in the country but also from constitutional amendments.
In my opinion, there is no substance in this argument.
Although "law" must ordinarily include constitutional law, there is 'a juristic distinction between ordinary law made in exercise of legislative power and constitutional law which is Made in exercise of constituent power.
In a written federal form of Constitution there is a clear and well known distinction between the law of the Constitution and ordinary law made by the legislature on the basis of separation of powers and (1)[1964]7 S.C.R.82.
931 pursuant to the power of law making conferred by the Consti tution (See Dicey on 'Law of the Constitution, Tenth: Edn.
p. 110, Jennings, 'Law and the Constitution ' pp.
62 64, and 'American Jurisprudence ', 2nd Edn.
16, p. 181).
In such a written Constitution, the amendment of the Constitution is .a substantive, constituent act which is made in the exercise, of the sovereign power which created the Constitution and which is effected by a special means, namely, by a predesigned fundamental procedure unconnected with ordinary legislation.
The amending power under article 368 is hence sui generis and cannot be, compared to the law making power of Parliament pursuant to article 246 read with List I and 111.
It follows that the expresSion "law" in article 13(2) of the Constitution cannot be construed as including an amendment of the Constitution which is by Parliament in exercise of, its sovereign constituent power, but must mean law made by Parliament in its legislative capacity :pursuant to the powers of law making given by the Constitution itself under article 246 read with Lists I and In of the 7th Schedule.
It is also clear, on the same line of reasoning, that 'law ' in article 13(2) cannot be construed so as to include 'law ' made by Parliament under articles 4, 169, 392, 5th Schedule Part D and 6th Schedule para 2 1.
The amending power of Parliament exercised under these Articles stands on the same as the constitutional amendment made under article U8 so far as article 13(2) is concerned and does not fall within the definition of law within the meaning of this last article.
It is necessary to add that the definition of 'law ' in article 13(3) does not include in terms a constitutional amendments though it includes "any Ordinance,, order, bye law, rule, regulation, notification, custom or usage ".
It should be noticed that The language.
of article 3 6 8 is perfectly general and empowers Parliament to amend the Constitution without any exception Whatsoever.
H I ad it been intended by the Constitution makers that the fundamental rights guaranteed under Part III should be completely outside the scope of article 368, it is reasonable to assume that they would have made an express provision to that effect.
It was stressed by the petitioners during the course 'of the, argument that Part III is headed as 'Fundamental Rights" and that article 32 "guarantee 's ' the right to move the Supreme Court by appropriate proceedings for enforcement of rights conferred by Part M.
But the expression "fundamental" in the phrase "Fundamental Rights" means that such rights are fundamental vis a vis the laws of the legislatures and the acts of the executive authorities mentioned in article 12.
It cannot be suggested, that the expression "fundamental" lifts the fundamental rights above the Constitution itself.
Similarly, the expression "guaranteed ' in article 32(1) and 32(4) means that the right to move the Supreme Court for enforcement of fundamental rights without 932 exhausting the, normal channels through the High Courts or the lower courts is guaranteed.
This expression also does not place the fundamental rights above the Constitution.
I proceed to consider the next question arising in this case, the scope of the amending power under article 368 of the Constitution.
It is contended on behalf of the petitioners that article 368 merely lays down the procedure for amendment and does not vest the amending power as such in any agency constituted under that article.
I am unable to accept this argument as correct Part XX of the Constitution which contains only article 368 is described as a Part dealing with the Amendment of the Constitution and article 368 which prescribes the procedure for amendment of the Constitution, begins by saying that an amendment of this Constitution may be initiated in the manner therein indicated.
In MY Opinion, the expression "amendment of the Constitution" in article 368 plainly and unambiguously means amendment of all the provisions of the Constitution.
It is unreasonable to suggest that what article 368 provides is only the mechanics of the procedure to be followed in amending the Constitution without indicating which provisions of the Constitution can be amended and which cannot.
Such a restrictive construction of the substantive part of article 368 would be clearly untenable.
The significant fact , that a separate Part has been devoted in the Constitution for "amendment of the Constitution and there is only one Article in that Part shows that both the power to amend and the procedure to amend are enacted in article 368.
Again, the words "the Constitution shall stand amended in accordance with the terms of the Bill" in article 368 clearly contemplate and provide for the power to amend after the requisite procedure has been followed.
Besides, the words used in the proviso unambiguously indicate that the substantive part of the article applied to all the provisions of the Constitution.
It is on that basic assumption that the proviso prescribes a specific procedure in respect of the amendment of ,the articles mentioned in cls.
(a) to (e) thereof.
Therefore it must be held that when article 368 confers on Parliament the right to amend the Constitution the power in question can be exercised over all the provisions of the Constitution.
How the power should be exercised, has to be determined by reference to the question as to whether the proposed amendment falls under the substantive part of article 368, or whether it attracts the procedure contained in the proviso.
It was suggested for the petitioners that the power of amendment is to be found in articles 246 and 248 of the constitution read with item 97 of List I of the 7th Schedule.
I do not think that it is possible to accept this argument.
Article 246 stats that 933 Parliament has exclusive power to make laws with respect to matters enumerated in List I in the Seventh Schedule, and article 248, similarly, confers power on Parliament to make any law with respect to any matter not enumerated in the Concurrent List or State List.
But the power of law making in articles 246 and 248 is "subject to the provisions of this Constitution".
It is apparent that the power of constitutional amendment cannot fall within these Articles, because it is illogical and a contradiction in terms to say that the amending power can be exercised and at the same time it is "subject to the provisions of, the Constitution".
It was then submitted on behalf of the petitioners that the amending power under article 368 is subject to the doctrine of implied limitations.
In other words, it was contended that even if article 368 confers the power of.
amendment, it was not a general but restricted power confined only to the amendable provisions of the Constitution, the amendability of such provision being determined by the nature and character of the respective provision.
It was argued, for instance, that the amending power cannot be used to abolish the compact of the Union or to destroy the democratic character of the Constitution teeing individual and minority rights.
It was said that the Constitution was a permanent compact of the States, that the federal character of the States was individual, and that the existence of any.
of the States as part of the federal Compact Cannot4be put an end to by the power of amendment.
It was also said that the chapter of fundamental rights of the Constitution cannot be the subject matter of any amendment under article 368.
It was contended that the preamble to the Constitution declaring that India was a sovereign democratic republic was beyond the scope of the amending Power.
it, was suggested that other basic, features of the Constitution were the Articles relating to.
distribution of legislative powers, the Parliamentary form of Government and the establishment of Supreme Court and the High, Courts in the various States.
I am unable to accept this argument as correct.
If the Constitution makers considered that there were certain basic features of the Constitution which were permanent it.
is must unlikely that they should not have expressly said in Art 368 that these basic features were.
not amendable.
On the contrary, the Constitution makers have expressly provided.
that article 368 itself should be amendable by the process indicated in the proviso to that Article.
This cir cumstance is significant and suggests.
that all the articles of the Constitution are amendable either under the proviso to article 368 or under the main part of that Article.
In MY opinion, there is no room for an.
implication in the construction of article 368.
So far as the federal character of the Constitution is concerned, it was held by this Court in State of West Bengal vs Union of Cl/67 14 934 India(1) that the federal structure is not an essential pan of our Constitution and there is no compact between the States and them is no dual citizenship in India.
It was pointed out in that case that there was no constitutional guarantee against the alteration of boundaries of the States.
By An. 3 the Parliament is by law authorised to form a new State by redistribution of the territory of a. State or by uniting two or more States or parts of States or by uniting any territory to a part of any State, to increase the area of any State, to diminish the area of any State to alter the boundaries of any State, and to alter the name of any State.
In In Re The Berubari Union and Exchange of Enclaves (2) it was argued that the Indo Pakistan agreement with regard to Berubari could not be implemented even by legislation under article 368 because of the limitation imposed by the preamble to the Constitution and that such an agreement could not be implemented by a referendum.
The argument was rejected by this Court and it was held that the preamble could not, 'in i any way, limit the power of Parliament to cede parts of the national territory.
On behalf of the petitioners the argument was s that the chapter on fundamental rights was the basic feature, of the Constitution and cannot be the subject of the amending power under Art 368.
It was argued that the freedoms of democratic life are secured by the chapter on fundamental rig its and dignity of the individual cannot be preserved if any of the fundamental rights is altered or diminished.
It is not possible to accept this argument as correct.
The concepts of liberty and equality are changing and dynamic and hence the notion of permanency or immutability cannot be attached to any of the fundamental rights.
The Directive Principles of Part IV are as fundamental as the constitutional rights embodied in Part III and article 37 imposes a constitutional duty upon the States to apply these principles in making laws.
Reference should in particular be made to article 39(b) which enjoins upon the State to direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good.
article 3 8 imposes a duty upon, the State to promote the welfare of the people by securing and protecting as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
I have already said that the language of article 368 is clear and unambiguous in support of, the view that there is no implied limitation on the amending power.
In Principle also it aPPears unreasonable to suggest that the Constitution makers wanted to provide that the fundamental rights guaranteed by the Constitution should never be touched by way of, amendment.
In modern democratic thought I there are two main trends the liberal idea of individual 'rights (1) [1964] 1 S.C.R. 371 p 405.
(2) 935 protecting the individual and the democratic idea proper pro claiming the equality of rights and popular sovereignty .
The gradual extension of the idea of equality from political to economic and social fields in the modern State has led to the problems of social security, economic planning and industrial welfare legislation.
The implementation and harmonisation of these.
somewhat conflicting principles is a dynamic task.
The adjustment between freedom and compulsion, between the rights of individuals and the social interest and welfare must necessarily be a matter for changing needs and conditions.
The proper approach is therefore to look upon the fundamental rights of the individual as conditioned by the social responsibility, by the necessities of the Society, by the balancing of interests and not as pre ordained and untouchable private rights.
As pointed out forcefully by Laski: "The struggle for freedom is largely transferred from the plane of political to that of economic rights.
Men become less interested in the abstract fragment of politi cal power an individual can secure than in the use of massed pressure of the groups to which they belong to secure an increasing share of the social Product.
Individualism gives way before socialism.
The roots of liberty are held to be in the ownership and control of the instruments of production by the state, the latter using its power to distribute the results of its regulation with increasing approximation to equality.
So long, as there is inequality, it is argued, there cannot be liberty.
The historic inevitability of this evolution was seen a century ago by de tocqueville.
It is interesting to compare his insistence that the democratization of political power meant equality and that its absence would be regarded by the masses as oppression with the argument of Lord Action that liberty and equality are antitheses.
To the latter liberty was essentially an autocratic ideal; democracy destroyed individuality, which was the very pith of liberty, by seeking identity of conditions.
The modem emphasis is rather toward the principle that material equality is growing inescapable and that the affirmation of personality must be effective upon an immaterial plane.
it is found that doing as one likes, subject only to the demands of peace, is incompatible with either international or municipal necessities.
We pass from contract to relation as we have passed from status to contract.
Men are so involved in intricate networks of relations that the place for their 936 liberty is in a sphere where their behaviour does not impinge upon that self affirmation of others which is liberty." (Encyclopaedia of the Social Sciences, Vol. IX, 445.).
It must :not be forgotten that the fundamental right guaran teed by article 31, for.
instance.
is not absolute.
It should be not that cl.
(4) of that Article, provides an exception to the requirements of cl.
(2). 'Clause (4) relates 'to Bills of a State Legislature relating to public acquisition which were pending at the commencement of fhe Co 'stitution.
If such a Bill has been passed and assented to by the President, the Courts shall have no jurisdiction to question the validity of such law on the of contravention of cl.
(2), ie., on the ground that it does not provide for compensation or that it has been enacted without a public purpose.
Clause (6) of the, Article is another exception to cl.
(2) and provides for ouster of jurisdiction of the Courts.
While cl.
(4) relates to Bills pending in the State Legislature at the encement of the Consistitution, cl.
(6) relates to Bills enacted by the State within IS I months before commencement of the Constitution i.e., Acts providing for public acquisition which were enacted not earlier than July 26, 1948.
If the President certifies ' 'such an Act within 3 months from the commencement of the Constitution, the Courts shall have no jurisdiction to invalidate that Act on the ground of contravention of cl.
(2) of that Article Similarly, the scheme of Art 19 indicates that the fundamental rights guaranted by sub cls.
(a) to (g) of cl, (1) can be validly regulated in the light of the provisions contained in cls.
(2) to (6) of article 19.
In other words, the scheme of Art.19 is two fold; the fundamental rights of the citizens are of paramount importance, but even the said fundamental rights can be regulated to serve the interests of the general public or other objects mentioned respectively in cls.
(2) to (6) of article 19.
It is right to state that the purposes for which fundamental rights can be regulated which are s specified in cls.
(2) to (6), could not have been assumed by the Constitution makers to be static and incapable of expansion.
It cannot be assumed that the Constitution makers intended to forge a political strait jacket for generations to come.
The Constitution makers , must have anticipated that in dealing with, socioeconomic problems which the 1egislatures may have to face from time to time, the concepts of public interest and other important considerations which are the basis of cls.
(2) to (6), may change and may even expand.
As Holmes ' J. has said in Abrams vs United States (1) : "the .,Constitution is an experiMent, as all life is an experiment".
It is therefore legitimate to assume that the Constitution makers (1) ; , 630. 937 intended that Parliament should be competent to make amend ments in these rights so as to meet the challenge of the problems which may arise in the course of socioeconomic progress and development of the country.
I find it therefore difficult to accept the argument of the petitioners thal the Constitution makers contemplated that fundamental rights enshrined in Part III were finally and immutably settled and determined once and for all and these rights are beyond the ambit of any future amendment.
Today at a time when absolutes are discredited, it must riot be too readily assumed that there are basic features of the Constitution which shackle the amending power and which take precedence over the general welfare of the nation and the need for agrarian and social reform.
In construing article 368 it is moreover essential to remember the nature and subject matter of that Article and to interpret it subjectae materies.
The power of amendment is in point of quality an adjunct of sovereignty.
It is in truth the exercise of the highest sovereign :power in the State.
If the amending power is an adjunct of sovereignty it does not Admit of any limitations.
This view is expressed by Dicey in "Law of the Constitution", 10th Edn., at page 148 as follows "Hence the power of amending the constitution has been placed, so to speak, outside the constitution, and that the legal sovereignty of the United States resides in the States ' governments as forming one aggregate body represented by three fourths of the several States at any time.
belonging to the Union.
" A similar view is stated by Lord Bryce in" "The" American Commonwealth", Vol. 1, ch.
XXXII, page 366.
Lester Bernhardt Orfield states,as follows in his book he Amending of the Federal Constitution" "In the last analysis, one is brought to the conclusion that sovereignty in the United States, if it can be said to exist at all, is located in the amending body.
The amending body has often beep referred to as the sovereign, because it meets the fest of the location of sovereignty.
As Willoughby has said: 'In all those cases in which, owing to the distribution of governing power, there is doubt as to the political body in which the Sovereignty rests, the test to be applied is the determination of which authority has, in the last instance, the legal power to determine its own competence as well as that of others '.
938 Applying the criteria of sovereignty which were laid down at the beginning of this chapter, the amending, body is sovereign as a matter of both law and fact.
Article Five expressly creates the amending body.
Yet in a certain manner of speaking the amending body may be said to exist as a matter of fact since it could proceed to alter Article Five or any other part of the Constitution.
While it is true that the sovereign cannot act otherwise than in compliance with law, it is equally true that it creates the law in accordance with which it is to act.
" In his book "Constitutional Law of the United States", Hugh Evander Willis says that the doctrine of amendability of the Constitution is based on the doctrine of the sovereignty of the people ,and that it has no such implied limitations as that an amendment shall not contain a new grant of , power nor be in the form of legislation, nor change "our dual form of government nor change the protection of the Bill of Rights, nor make any other change in the Constitution." James G. Randall also enunciates the proposition that when a constitutional amendment is adopted "it is done not by the 'general government, but by the supreme sovereign power of the nation i.e., the people, acting through State Legis latures or State conventions" and that "the amending power is 'equivalent to the Constitution makin power and is wholly above 'the authority of the Federal Government" ( 'Constitutional Pro Under Lincoln ', p. 395).
, The legal position is summarised 'by Burdick at page 48 of his treaties "The Law of the American Constitution as follows : "The result of the National Prohibition Cases ; seems to be that there is no limit to the power to amend the Constitution, except that a State may not without its consent be deprived of its equal suffrage in the Senate.
To out the case most extremely, this means that by action of two third, of both Houses of Congress and of the, legislatures in three fourths , of the states all of the powers of the national government could be surrendered to the States, or all of the reserved powers of the States could be transferred to the federal government.
It is only public opinion acting upon these agencies which places any check upon the amending power.
But the alternative to this result would be to recognize the power of the Supreme Court to veto the will of the people expressed in a constitutional amendment without any possibility of the reversal of the court 's action except through revolution.
" 939 The matter has been clearly put by George Vedel in Manuel Elementaire De Droit Constitutionnel (Recueil Sirey) at page 117 as follows : "Truly speaking no constitution prohibits for ever its amendment or its amendment in all its aspects.
But it can prohibit for example, the amendment (revision) during a certain time (the Constitution of 1791) or it can prohibit the amendment (revision) on this or that point (as in the Constitution of 1875) which prohibits amendment of the republican form of Government and the present Constitution follows the same rule.
But this prohibition has only a political but no juridical value.
In truth from the juridical viewpoint a declaration of absolute , constitutional immutability cannot be imagined.
The Constituent power being the supreme power in the state cannot be fettered, even by itself.
For example,article 95 of our constitution stipulates, "The republican form of Government cannot be the subject of a proposal for amendment.
But juridically the obstacle which this provision puts in the way of an amendment of the republican form of government can be lifted as follows.
It is enough to abrogate, by way of amendment (revision) the article 95 cited, above.
After this, the obstacle being removed, a second amendment can deal with the republican form of Government.
In practice, this corresponds to the idea that the constituent assembly of today cannot bind the nation of tomorrow.
" the argument of implied limitation was advanced by Mr. N. C. Chatterji and it was contended that item No. 3 of the Indo Pakistan Agreement providing for a division of Berubari Union between India and Pakistan was outside the power of constitutional amendment and that the preamble to the, Constitution did not permit the dismemberment of India but preserved the integrity of the territory of India.
The argument was rejected by this Court and it was held that Parliament acting under article 368 can make a law to give effect to and implement the Agreement in question or to pass a law amending article 3 so as to cover cases of cession of the territory of India and thereafter make a law under the amended article 3 to implement the Agreement.
(1) 940 There is also another aspect of the matter to be taken into account.
If the fundamental rights are unamendable and if article 368 does not include any such power it follows that the amendment of, say, article 31 by insertion of articles 31 A and 31 B can only be made by a violent revolution.
It was suggested for the petitioners that an alteration of fundamental rights could be made by convening a new Constituent Assembly outside the frame work of the present Constitution, but it is doubtful if the proceeding,., of the new Constituent Assembly will have, 'any legal validity, for the reason is that if the Constitution provides its own method of amendment, any other method of amendment of the Constitution will be unconstitutional and void.
For instance, in George section Hawke vs Harvey C. Smith, as Secretairy of State of Ohio(1) it was held by the Supreme Court of the U.S.A. that Referendum provisions.
of State Constitutions ' and statutes cannot be applied in the 'ratification or rejection of amendments to the Federal Constitution without violating the requirements of Article 5 of such Constitution and that such ratification shall be by the legislatures of the several states, or by conventions therein, as Congress shall decide.
It was held in that case that the injunction was properly issued against the calling of a referendum election on the act of the legislature of a State ratifying an amendment to the Federal Constitution.
If, therefore, the petitioners are right in their contention that article 31 is not amendable within the frame work of the present Constitution, the only other recourse for making the amendment would, as I have already said, be by revolution and not through, peaceful means, It cannot be reasonably supposed.
that the Constitution makers contem plated that article 31 or any other article on fundamental rights should be altered by a violent revolution and not by peaceful change.
It was observed in Feigenspan vs Bodine (2) "If the plaintiff is right in its contention of lack of power to insert the Eighteenth Amendment into the United States Constitution because of its subject matter.
it follows that there is no way to incorporate it and others of like character into the national organic law, except, through revolution.
This, the plaintiff concedes, is the inevitable conclusion of its contention.
This is so starting a proposition that the judicial mind may be pardoned for not readily acceding to it, and for insisting that only the most convincing reasons will justify 'its acceptance.
" I am, therefore, of the opinion that the petitioners Are unable to make good their argument on this aspect of: the case.
It was then contended for the petitioners,that there would be anomalies if article 368 is interpreted to have no implied limita (1) ; (2)264 Fed.
941 tions.
It was said that the more important articles of the Constitution can be amended by the procedure mentioned in the substantive part of article 368 but the less important articles would require ratification by the legislatures of not less than half of the States under the proviso to that Article.
It was argued that the fundamental rights and also article 32 could be amended by the majority of two thirds of the members of Parliament but article 226 cannot be amended unless there was ratification of the legislatures of not less than half of the States, It was pointed out that articles 54 and 55 were more difficult to amend but not article 52.
Similarly, article ' 162 required ratification of the States but not article 163 which related to the 'Council of Ministers to aid and advise the Governor in the exercise of his functions.
In my opinion the argument proceeds on a misconception.
The scheme of article 368 is not to divide the Articles of the Constitution into two categories, viz., important and not so important Article.
It was contemplated by the Constitution makers that the amending power in the main part of article 368 should extend to each and every article of the Constitution but in the case of such articles which related to the federal principles or the relation of the States with the Union, the ratification of the legislatures of at least half the States should be obtained for any amendment.
It was also contended that if article 368 was construed without any implied limitation the amending power under that Article could be used for subverting the Constitution.
Both Mr. Asoke, Sen and Mr. Palkiwala resorted to the method of reduction ad absurdem 'MI pointing out the abuses that might occur if there were no limitations on the power to amend.
It was suggested that Parliament may, by a constitutional amendment, abolish the parliamentary system of government or repeal the chapter of fundamental rights or divide India into.
two States, or even reintroduce the rule of a monarch.
It. is inconceivable that 'Parliament should utilise the amending power for bringing about any of these contingencies.
It is, however, not permissible, in the first place, to assume that in a matter of constitutional amendment there will be abuse of power and then utilise it as a test for finding out the scope of the amending power.
This Court has declared repeatedly that the possibility of abuse is not to be used as a test of the existence or extent of a legal power [See for example, State of West Bengal vs Union of India(1), at page 407].
In the second place, the amending power is a power, of an altogether different kind from the ordinary governmental power and if an abuse occurs,, it occurs at the hands of Parliament and the State Legislatures representing an extraordinary majority of the people, so that for all practical purposes it may be said to be the people, or at least.
the highest agent of the people, and one exercising sovereign powers.
It is therefore (1) [1964]1 S.C.R. 371. 942 anomalous to speak of 'abuse ' of a power of this description.
In the last analysis, political machinery and artificial limitations will not protect the people from themselves.
The perpetuity of our democratic institutions will depend not upon special mechanisms or devices, nor even upon any particular legislation, but rather upon the character and intelligence and the good conscience of our people themselves.
As observed by Frankfurter, 1.
in American Federation of Labour vs American Sash & Door Co.(1) "But a democracy need rely on the courts to save it from its own unwisdom.
If it is alert and without alertness by the people there can be no enduring democracy unwise or unfair legislation can readily be removed from the statute books.
It is by such vigilance over its representatives that democracy proves itself" I pass on to consider the next objection of the petitioners that the true purpose and object of the impugned Act was to legislate in respect of land and that legislation 1n respect of land falls within the jurisdiction of State legislatures under Entry 18 of List 11, and the argument was.
that since the State Legislatures alone can make laws in respect of land, Parliament had no right to pass the impugned Act.
The argument was based on the assumption that the impugned Act purports to be, and in fact is, a piece of land legislation.
It was urged.
that the scheme of articles 245 and 246 of the Constitution 'clearly showS that Parliament has no right to make a law in respect of land, and since the impugned Act is a legislative measure in relation to land, it is in Valid.
In my opinion, the argument is based upon a misconception.
Whet the impugned Act purports to do is not to make any land legislation but to protect and validate the legislative measures in respect of agrarian reforms passed by the different State Legislatures in the country by granting them immunity from attack based on the plea that they contravene fundamental rights.
The impugned Act was passed by Parliament in exercise of the amending power conferred by article 368 and it is impossible to accept the argument that the constitutional power of amendment can be fettered by articles 245 and 246 or by the legislative Lists.
It was argued for, the petitioners that Parliament cannot validate a law Which it has no Power to enact.
The proposition holds good where the validity on impugned Act turns on whether the subject matter falls within or without the jurisdiction of the legislature which passed it.
But to make a law which contravenes the Constitution constitutionally valid is a matter of constitutional amendment, and as such it falls within the exclusive power of Parliament and within the amending power conferred by article 368.
I am accordingly of the opinion that the petitioners are unable to (1) ; ,556.
943 substantiate their argument on this aspect of the case.
I should like to add that in Lesser vs Garnett(1), in National Prohibition Cases(2 ) and in United States vs Sprague(3), a similar argument Was advanced to the effect that a constitutional amendment was not valid if it was in the form of legislation.
But the argument was rejected by the Supreme Court of the U.S.A. in all the three cases.
It remains to deal with the objection of the petitioners that the newly inserted articles 31 A and 31 B require ratification of the State legislatures under the proviso to article 368 of the Constitution because these articles deprive the High Courts of the power to issue appropriate writs under article 226 of the Constitution.
I do not "think there is any substance in this argument.
The impugned Act does not purport to change the provisions of article 226 and it cannot be, said even to have that effect directly or in any substantial measure.
It is manifest that the newly inserted articles do I not either in terms or in effect seek to make any change in article 226 of the Constitution.
Article 31 A aims 'at saving laws providing for the compulsory acquisition by the State of a certain kind of property from the operation of article 1 3 read with other relevant articles in Part III, while article 31 b purports to validate certain specified Acts g Regulations, already passed, which, but for such a; provision , would be liable to be impugned under article 13 It is therefore ' not correct to say that the powers of High Courts to issue writs is, in 'any way, affected.
The jurisdiaction 'of the High Courts remains just the same as it Was before.
Only 'a certain category of cases has been excluded from the purview of Part III and the High Courts can no longer intervene, not because their Jurisdiction or powers have been curtailed in any manner or to.
any but because there would be no occasion hereafter for the exercise of their power in such cases.
As I have already said, the effect of the impugned Act on the jurisdiction of the High Courts under article 226 of the, Con stitution is not direct but only incidental in character and therefore the contention " of the petitioners on this point against the validity of the impugned Act must be rejected.
It is well settled that in examining a constitutional question of this character, it is legitimate to consider whether the impugned legislation is a legislation directly in respect of the subject matter covered by any particular article of the Constitution or whether touches the said articles only incidentally or indirectly.
In A. K. Gopalan vs The State of Madras (4), kania , C.J., had occasion to consider the validity of the argument that, the Preventive detention order resulted in the detention of the applicant in a cell, and so, it contravened his fundamental rights guaranteed by (1) ; (2)253 U.S. 350.
(3) ; (4) ; 101. 944 article 19(1)(a), (b), (c), (d), (e) and (g).
, Rejecting this argument, the learned Chief Justice observed that the true approach in dealing with such a question was only to consider the directness of the legislation and not what will be the result of the detention otherwise valid, on the mode of the detenu 's life.
On that ground alone, he was inclined to reject the contention that the order of detention.contravened the fundamental rights guaranteed to the petitioner under article 19(1).
At page 100 of the report, Kania, C.J., stated as follows : "As the preventive detention order results in the detention of the applicant in a cell it was contended on his behalf that the rights specified in Article 19(1) (a), (b), (c), (d), (e) and (g) have been infringed.
It was argued that because of his detention he cannot have a free right to speech as and where he desired and the same argument was urged in respect of the rest of the rights mentioned in sub clauses (b), (c), (d) (e) and (g).
Although this argument is advanced in a case which deals with preventive detention, if correct, it should be applicable in the case of punitive detention also to any one sentenced to a term of imprisonment under the relevant section of the Indian Penal Code.
So considered, the argument must clearly be rejected.
In spite of the saving clauses (2) to (6), permitting abridgement of the rights connected with each of them, punitive detention under several sections of the Penal Code, i.e., for theft, cheating, forgery and even ordinary assault, will be illegaL Unless such conclusion necessarily follows from the article, it is obvious that such construction should be avoided.
In my opinion, suc h result is.
clearly not the outcome of the Constitution.
The article has to be read without any pre conceived notions.
So read, it clearly means that the legislation to be examined must be directly in respect of one of the rights mentioned in the sub clauses.
If there is a legislation directly attempting to control a citizen 's freedom of speech or ex pression, or his right to assemble peaceably and without arms, etc., the question whether that legislation is saved by the relevant saving clause of article 19 will arise.
If, however, the legislation is not directly in respect of any of these subjects but as a, result of the operation of other legislation, for instance, for punitive or preventive detention, his right under any of these sub clauses is abridged, the question of the application of article 19 does not arise. 'Me true approach is only to consider the direct ness of the legislation and not what will be the result of the detention otherwise valid, on the mode of the detenu 's 945 life.
On that , short ground, in my opinion, this argument about the infringement of the rights mentioned in article 19(1) generally must fail.
Arty other construction put on the article, it seems to me , will be unreason It is true that the opinion thus expressed by Kania, C.J. in the case of A. K. Gopalan vs The State of Madras( ) did not receive, the concurrence of the other learned Judges who heard the said case.
Subsequently, however, in Ram Singh & Others vs The State of Delhi & Anr.(2) the said observations were cited with approval by the Full Court.
The same.
principle was accepted by this Court in Express Newspapers (Pvt.) Ltd. vs The Union of India( '), in the majority judgment in Atiabari Tea Co. Ltd. vs The State of Assam (4 ) and in Naresh Shridhar Mirajkar vs The State of Maharashtra("),.
Applying the same principle to the present case, consider that the effect of the impugned Act on the powers of the High Court under article 226 is indirect and incidental and not direct.
I hold that the impugned Act falls under the substantive part of article 368 because the object of the impugned Act is to amend the relevant Articles in Part III which confer fundamental rights on citizens and not to change the power of the High Courts under article 226.
In this connection I should like to refer to another aspect of the matter.
The question about the validity of the Constitution (First Amendment) Act has been considered by, this Court in Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar(6).
In that case, the validity of the said Amendment Act was challenged, firstly, on the ground that the newly inserted articles 31 A and 31 B sought to make changes in articles 132 and 136 in Ch.
IV of Part V and article 226 in Ch.
V of Part VI.
The second ground was that the amendment was invalid because it related to legislation in respect of land.
It was also urged, in the third place, that though it may be open to Parliament to amend the provisions in respect of fundamental rights contained in Part ITT, the amendment made in that behalf would have to be tested in the light of provisions of article 13(2) of the Constitution.
The argument was that the law to which article 13(2) applied would include a law passed by Parliament by virtue of its constituent power to amend the Constitution, and so, its validity will have to be tested by article 13(2) itself.
All these arguments were rejected by this Court and it was held in that case that the Constitution (First Amendment) Act was legally valid.
The same question arose for consideration in Sajjan Singh vs State of Rajasthan (7) with regard to the validity of the Constitution (Seventeenth Amendment) Act, 1964.
In that case, the petitioners in their (1) ; (2) ; ,456.
(3) ,129 30.
(4) ; , 864.
(5) ; (6) [1995] 1 S.C.R. 89.
(7) 946 Writ Petitions in this Court contended that the Constitution (Seventeenth Amendment) ' Act was constitutionally invalid since the powers Prescribed by article 226 which is in Ch.
V, Part VI of the Constitution Were likely to be affected by the Seventeenth Amendment, and therefore the special procedure laid down under article 368 should have been followed.
It was further contended in that case that the decision of this court in Sankari Prasads(1) case should be reconsidered. 'Both the contentions were re , rejected by this Court by ' a majority Judgment and it was held that the Constitution (Seventeenth Amendment) Act amended the fundamental rights solely with the object of assisting the State Legislatures to give effect to the socioeconomic policy of the party inpower and its effect on article 226 was incident and insignificant and the impugned Act therefore fell under the substantive part of article 368 and did not attract the proviso to that article.
It was further held.
by this Court that there Was no justification for re considering Sankari Prasad 's(1) case.
On behalf of the respondents it was submitted by the Additional Solicitor Generat that this was a very strong case for the application of the principle of stare decisis.
In my opinion, this contention must be accepted as correct.
If the arguments urged by the petitioners are to prevail it would leadto the inevitable consequence that the amendments made to the Constitution both in 1951 and in 1955 would be rendered invalid and.
a large number of decisions dealing with the validity of the Acts included in the 9th Schedule which were pronounced by this Court ever since, the decision in Sankari Prasad 's(1) case was dec lared, would also have to be overruled.
It was also pointed out that Parliament, the Government and the people have acted on the, faith of the decision of this Court in Sankari Prasad 's(1) case and titles to property have been transferred, obligations have been incurred and rights have been acquird in the implementation of the legislation included in the 9th Schedule.
The, effect of land reform legislation has been clearly summarised in ch.
VIII of Draft Outline on Fourth Plan as follows "Fifteen years ago when the First Plan was being formulated, intermediary tenures like zamindaris, jagirs and inams covered more than 40 per cent of the area.
There were large disparities in the ownership of land held under ryotwari tenurer which covered the other 60 per cent area; and ' a substantial portion of the land was cultivated through tenants at will and share croppers who paid about one half the produce as rent.
Most holdings were small and fragmented.
Besides, there was a large population of landless agricultural labourers.
In these conditions, the, principal.
measures recommended for securing the objec (1)[1952] S.C.R. 89. 947 tives of the land policy were the abolition of intermediary tenures, reform of the tenancy system, including fixation of fair rent at one fifth to one fourth of the grossproduce, security of I tenure for the tenant, bringing tenants into direct relationship with the State and investing in them ownership of land.
A ceiling on land holding was also recmmended so that some surplus land, may be made available for redistribution to the landless agricultural workers.
Another important part of, the progamme was consolidation of agricultural holdings and increse in the size of the operational unit to an economic scale through cooperative methods.
Aboiition of Intermediaries.
During the past 15 years, progress has been made in several directions.
Theprogramme for the abolition of intermediaries has been carried out practically all over, the country.
About 20 million tenants of former intermediaries came into direct relationship with the State and became owners of their holdings.
State Governments are now engaged in the assessment and payment of compensation.
There were some initial delays but a considerable progress hag been made in this direction in recent years and it is hoped that the issue of compensatory bonds will be completed in another two years.
Tenancy Reform.
TO deal with the problem of tenants at will in the ryotwari areas and of 'sub ' tenants in the zamindari areas, a good deal of legislation has been enacted.
Provisions for security of tenure, for bringing them into direct relation with the State and converting them into owners have 'been made in several States.
As a result, about 3 million tenants and share croppers have acquired ownership of 'More than 7 million acres.
Ceiling on Holdings.
Laws imposing ceiling on agri,cultural holdings bave been enacted in all the States.
In the former Punjab area, however the State Government has the power to settle tenants on land in excess of the permissible limit although it has not set a ceiling on ownership.
According to available reports over 2 million acres of surplus areas in excess of the ceiling limits have, been declared or taken possession of by Government.
" It is true that the principle of stare decisis may not strictly apply to, a decision on a constitutional point.
There is no restriction in the Constitution itself which prevents this Court from reviewing its earlier decisions or even to depart from them in the interest of public good.
It is true that the problem of construing constitutional provisions cannot be adequately solved by merely adopting 948 the literal construction of the words used in, the various articles.
The Constitution is an organic document and it is intended to serve as a guide to the solution of changing problems which the Court ' may have to face from time to time.
It is manifest that in a progressive and dynamic society the character of these problems is bound to change with the inevitable consequence that the relevant words used in the Constitution may also change their meaning and significance.
Even so., the Court is reluctant to accede to, the suggestion that its earlier decisions should be frequently reviewed or departed from.
In such a case the test should be : what is the nature of the error alleged in the earlier decision, what is its impact on the public good and what is the compelling character of the considerations urged in support of the contrary view.
It is also a relevant factor that the earlier decision has been followed in, a large number of cases, that titles to property have passed and multitude of rights and obligations have been created in consequence of the earlier decision.
I have already dealt with the merits of the contention of the petitioners with regard to the validity of the impugned Act and I have given reasons for holding that the impugned Act is constitutionally valid and the contentions ,of the petitioners are unsound.
Even on the assumption that it is possible to take a different view and to hold that the impugned Act is unconstitutional I am of opinion that the principle of state decisis must be applied to the present case and the plea made by the, petitioners for reconsideration of Sankari Prasad(1) case and the decision in Sajjan Singh vs State of Rajasohan(2) is wholly unjustified and must be rejected.
In Writ Petition No. 202 of 1966, it was contended by Mr. Nambyar that the continuance of the Proclamation of Emergency under article 352 of the Constitution was a gross violation of power because the emergency had ceased to exist.
It was also contended that article 358 should be so construed as to confine its operation on to legislative or executive action relevant to the Proclamation of Emergency.
It was submitted that the Mysore State was rot a border area and the land reform legislation of that State had no relevant connection with the Proclamation of Emergency and the fundamental rights conferred by article 19 cannot be suspended so far as the petitions are concerned.
I do not think that it is necessary to express any opinion on these points because the Writ Petition must fail on the other grounds which I have already discussed above.
It is also not necessary for me to express an opinion on the doctrine of prospective overruling of legislation.
For the reasons already expressed I hold that all these petitions fail and should be dismissed, but there will be no order as to Petitions dismissed.
Costs. | The validity of the Punjab Security of Land Tenures Act, 1953 (Act 10 of 1953) and of the Mysore Land Reforms Act (Act 10 of 1962) as amended by Act 14 of 1965 was challenged by the petitioners under article 32 of the Constitution.
Since these Acts were included in the 9th Schedule to the Constitution by the Constitution (Seventeenth) Amendment Act, 1964, the validity of the said Amendment Act was also challenged.
In this connection it was urged that Sankari Prasad 's case in which the validity of the constitution (First) Amendment Act, 1951 had been upheld and Sajjan Singh 's case in which the validity of the Constitution (Seventeenth) Amendment Act, 1964, had been upheld by this Court, had been wrongly decided.
It was contended that Parliament had no power to amend fundamental rights in Part III of the Constitution.
HELD: Per Subba Rao, C.J., Shah, Sikri, Shelat and Vaidialingam, JJ.
(Hidayatullah, J. Concurring) : Fundamental Rights cannot be abridged or taken away by the amending procedure in Ail.
368 of the Constitution.
An amendment to the Constitution is 'law ' within the meaning of article 13(2) and is therefore subject to Part III of the Constitution.
Sri Sankari Prasad Singh Deo vs Union of India Rajasthan; , , reversed.
Per Subba, Rao, C.J., Shah, Sikri, Shelat and Vaidialingam, JJ.
(i) Fundamental rights are the primordial rights necessary for the development of human personality.
They are the rights which enable a 763 man to chalk out his own life in the manner he likes best.
Our Constitution, in addition to the well known fundamental rights, also included the rights of minorities and other backward communities in such rights.
[789 E] The fundamental rights are given a transcendental position under our Constitution and are kept beyond the reach of Parliament.
At the same time Parts III and IV of the Constitution constituted an integrated scheme forming a self contained code.
The scheme is made so elastic that all the Directive Principles of State Policy can reasonably be enforced without taking away or abridging the fundamental rights.
While recognisingthe immutability of the fundamental rights, subject to social control the Constitution itself provides for the suspension or the modification of fundamental rights under specific circumstances, as in articles 33, 34 and 35.
The non obstante clause with which the last article opens makes it clear that all the other provisions of the Constitution are subject to this provision.
Article 32 makes the right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by the said Parts a fundamental right.
Even during grave emergencies article 358 only suspends article 19 and all other rights are untouched except those specifically suspended by the President under article 359.
[789 H; 790 D] The Constitution has given a place of permanence to the fundamental freedoms.
In giving to themselves the Constitution the people have reserved the fundamental freedoms to themselves.
article 13 merely in corporates that reservation.
The Article is however not the source of the protection of fundamental rights but the expression of the reservation.
The importance attached to the fundamental freedoms is so transcendatal that a bill enacted by a unanimous vote of all the members of both Houses is ineffective to derogate from its guaranteed exercise.
It is not what Parliament regards at a given moment as conducive to the public benefit but what Part III declarer.
protected, which determines the ambit of the freedom.
The incapacity of Parliament therefore in exercise of its amending power to modify, restrict, or imposefundamental freedoms in Part III arises from the scheme of theConstitution and the nature of the freedoms.
[792 D F] A. K. Gopalan vs State of Madras, [1950] S.C.R.88, State of Madras vs Smt.
Champakam Dorairajan, (1951) S.C.R. 525, Pandit M. section M. Sharma vs Shri Sri Krishna Sinha, [1959] Supp. 1 S.C.R. 806 and Ujjam Bai vs State of Uttar Pradesh, [1963] 1 S.C.R. 778, referred to.
If it is the duty of Parliament to enforce directive principles it is equally its duty to enforce them without infringing the fundamental rights.
The verdict of Parliament on the scope of the law of social control of fundamental rights is not final but justiciable.
If it were not so, the whole scheme of the Constitution would break.
[815 H; 816 A B] , (ii)Article 368 in terms only prescribes various steps in the matter of amendment.
The article assumes the power to amend found else where.
The completion of the procedural steps cannot be said to culminate in the power to amend for if that was so the Constitution makers could have stated that in the Constitution.
Nor can the power be implied either from article 368 or from the nature of the articles sought to be amended; the doctrine of necessary implication cannot be invoked if there is an express provision.
There is no necessity to imply any such power as Parliament has the plenary power to make any law including the law to amend the Constitution subject to the limitations laid down therein [793 E G] (iii)The power of Parliament to amend the Constitution is derived from articles 245, 246 and 248 read with item 97 in List I.
The residuary 764 power of Parliament can certainly take in the power to amend the Constitution.
[794 A D] Though a law made under article 245 is subject to the provisions of the Constitution it would be wrong to say that every law of amendment made under it would necessarily be inconsistent with the articles sought to be amended.
It cannot reasonably be said that a law amending an article is inconsistent with it.
The limitation in article 245 is in respect of the power to make a law and not of the content of the law made within the scope of its power.
[794 E F] An order by the President under article 392 cannot attract Art 368 as the amendment contemplated by the latter provisions can be initiated only by the introduction of a bill in Parliament.
It cannot therefore be said that if the power of amendment is held to be a legislative power the President acting under article 392 can amend the Constitution in terms of article 368.
[794 G H] (iv) The Constituent Assembly, it so minded, could certainly have conferred an express legislative power on Parliament to amend the Constitution by ordinary legislative process.
There is, therefore, no inherent inconsistency between legislative process and the amending one.
Whether in the field of a constitutional law or statutory law amendment can be brought about only by 'law '.
[794 C D] Article 13(2), for the purpose of that Article, gives an inclusive definition of 'law '.
It does not Prima facie exclude constitutional law.
The process under article 368 itself closely resemble the legislative process.
Article 368 is not a complete code in respect of the procedure of amendment.
The details of procedure in respect of other bills have to be followed so far as possible in respect of a Bill under article 368 also, The rules made by the House of the People providing procedure for amendments lay down a procedure similar to that of other bills with the addition of certain special provisions.
If amendment is intended to be Something other than law the constitutional insistence on the said legislative process is unnecessary.
The imposition of further conditions is only a safeguard against the hasty action or a protection to the states but does not change the legislative character of the amendment [795 G 796 C] Article 3 of the Constitution permits changes in States and their boundaries by a legislative process under articles 4 and 169 amendments in the Solution are made by 'law ' but by a fiction are deemed not to be amendments for the purpose of article 368.
This shows that amendment is law and that but for the fiction it would be an amendment within the meaning of Art, 368.
[796 C F] Therefore amendments either under article 368 or under other Articles are only made by Parliament following the legislative process and are 'law ' for the purpose of article 13(2).
[798 C] Mccawley vs The king, [1920]A.C., 691 and The Bribery Commissioner vs Pedrick Ransinghe, ; , referred to.
(v) One need not cavil at the description of amending power as a sovereign power for it is sovereign only viithin the scope of the power conferred by a particular Constitution which may expressly limit the power of amendment both substantive and procedural.
If cannot therefore be said that amending power can have no limitations being a sovere4p power.
[804] The argument that the amending process involves political questions and is therefore outside.the scope of judicial re view cannot also be aeCePted It may be.
Parliament seeks to amend the Constitution for political reasons but the court in denying that power will not be deciding 765 a political question; it will only be holding that Parliament has no power to armed Particular articles of the Constitution for any purpose whatsoever, be it political or otherwise.
[804 E G] (vi) If power to abridge the fundamental rights is denied to Parliament revolution is not a necessary result.
The existence of an all comprehensive power cannot prevent revolution if there is chaos in the country brought about by misrule or abuse of power.
Such considerations are out of place in construing the provisions of the Constitution by a Court of law.
[816 B C] (vii) While ordinarily @ Court will be reluctant to reverse its previous decisions it is its duty in the constitutional field to correct itself as early as possible, for otherwise the future progress of the country and happiness of the people will be at stake.
As it was clear that the decision in Sankari Prasad 's case was wrong, it was pre eminently a typical case where this Court should overrule it.
The longer it held the field the greater the scope for erosion of fundamental rights.
As it contained the seeds of destruction of the cherished rights of the people, the sooner it was overruled the better for the country.
[816 G H] The Superintendent and Legal Remembrancer Stale of West Bengal vs
The Corporation at Calcutta; , relied on.
(viii) The Constitution (Seventeenth Amendment) Act, 1964, inasmuch as it takes away or abridges fundamental rights was beyond 'the amending power of Parliament and void because of contravention of article 13(2).
But having regard to the history of this and earlier amendment to the Constitution, their effect on the social and economic affairs of the country and the chaotic situation that may be brought about by the sudden withdrawl at this stage of the amendments from the Constitution it was undesirable to give retroactivity of this decision.
The present was therefore a fit case for the application of the doctrine of "prospective.
overruling, evolved by the courts in the United States of America.
[805 E; 807 E, G; 808 C D] Great Northern Railway vs Sunburst Oil & Ref.
Co. ; , Chicot County Drainage vs Baxter State Bank; , , Griffin vs Illionis, ; , Wolf vs Colorado, ; : 193 L. Ed. 872, Mapp vs Ohio, ; : 6 L. Ed.
(2nd Edn.) 1081 and Link letter vs Walker; , , referred to.
(ix), The doctrine of "prospective overruling" is a modern doctrine suitable for a fast moving society.
It does not do away with the doctrine of state decision but confines it to past transactions.
While in Strict theory it may be said that the doctrine 'involves the making of law, *hat the court really does is to declare the law but refuse to give retroactivity to it.
It is really a pragmatic solution reconciling the two conflicting doctrines, namely, that a court finds the law and that it does make law It finds law but restricts its operation to the future.
It enables the court to bring about a smooth transition by correcting, its errors without disturbing the impact of those errors on past transactions.
By the application of this doctrine the past may be preserved and the future protected.
[913 A C; 814 E F] Our Constitution does not expressly of by necessary implication speak against the doctrine of prospective overruling.
Articles 32, 141 and 142 are designedly made comprehensive to enable the Supreme Court to declare law and to give such directions or pass such orders as are necessary to do complete justice.
The expression 'declared ' in article 141 is wider than the words 'found or made '.
The law declared by the Supreme Court is the law of the land.
If so, there is no acceptable reason why 7 66 the Court, in declaring the law in supersession of the law declared by it earlier, could not restrict the operation of the law as declared to the future and save the transactions whether statutory or otherwise that were affected on the basis of the earlier law.
[813 F H] As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, it would like to move warily in the beginning and would lay down the following propositions : (1) The doctrine of prospective overruling can be invoked only in matters arising under our Constitution; (2) it can be applied only by highest court of the country, ie.
the Supreme Court as it has the constitutional jurisdiction to declare law binding on all the Courts as it has India; (3) the scope of the retrospective operation of the law declared by the supreme Court superseding its earlier decisions is left to its discretion to be moulded in accordance with the justice of the cause or matter before it.
[814 C D] Applying the doctrine of prospective overruling in the circumstances of the present case the Court declared that this decision would not affect the validity of the Constitution (Seventeenth Amendment) Act 1964, or other amendments to the Constitution taking away or abridge the fundamental rights.
It further declared that in future Parliament will have no power to amend Part III of Abe Constitution so as to take away or abridge the fundamental rights.
[814 F G] (x) As according to the above decision the Constitution (Seventeenth Amendment) Act held the field the validity of the two impugned Acts, namely the Punjab Security of Land Tennures Act, 10 of 1953 and the Mysore Land Reforms Act, 10 of 1962, as amended by Act 14 of 1965, could, not be questioned on the ground that they offended Art 13, 14 or 31 of the Constitution.
[815 E] (xi) On the findings the following, questions did not fall to be considered : (a) Whether in the exercise of the power of amendment the fundamental structure of the Constitution may be changed or even destroyed or whether the power is restricted to making modification within the framework of the original instrument for its better effectuation ? (b) Whether the amendment of fundamental rights is covered by the proviso to article 368 ? (c) To what extent can the provisions of die Constitution other than fundamental rights be amended ? (d) To what extent can Part III be amended otherwise thin by taking away or abridging the fundamental rights ? (e) Whether the impugned Act could be sustained under the provisions of the Constitution without the aid of articles 31A and 31B of the Schedule.
Obiter If necessity to abridge the fundamental rights does arise the residuary power of Parliament may be relied upon to call for a constituent bly for making a new Constitution or radically changing it.
The recent Act providing for a poll in Goa, Daman and Diu was an instance of analogus exercise of such residuary power by the Parliament, [816 E F] Per Hidayatullah.
J. : (i) The scope of the amending power under the COnstitution is not to be determined by taking an apriori view of the 767 omnicompetence of article 368.
When there is conflict between that Article and article 13(2) juridical hermeneutics requires the Court to interpret them by combining 'them and not by destroying one with the aid of the other.
No part in a Constitution is superior to another part unless the Constitution itself says so and there is no accession of strength to any provision.
by calling it a code.
It is, the context of the legal provisions that illustrates the meaning of the different parts so that among them and between them there should be correspondence and harmony.
[857 H 858C] (ii) It is wrong to think of the Fundamental Rights as within Parliament 's giving or taking.
They are secured to the people by articles 12, 13, 32, 136, 141,,144 and 226.
The High Courts and finally this Court have been made the Judges of whether any lagislative or executive action on the part of the State, considered as comprehensively as is possible,offends the Fundamental Rights and article 13(2)declares that legislation which so offends is to be deemed to be void.
The general words of article 368 cannot be taken to mean that by calling an Act an Amendment of the Constitution Act a majority of total strengths and a 2/3rds majority of the members presnt and voting in each House may remove not only any of the Fundamental Rights but the whole Chapter giving them.
[860 A D; 867 FF] (iii) In Britain there is no distinction between constitutional law and ' ordinary law as to the procedure of their enactment.
In our Constitution too in spite of the claim that article 368 is a Code articles 4, 11 and 169 show that the amendment of the Constitution can be by the ordinary law making procedure.
By this method one of the legislative limbs in a State can be removed or created.
This destroys at one stroke the claim that article 368 is a code and.
also that any special method of amendment of the Constitution is fundamentally necessary.
[861 E G] The only difference between constitutional law and ordinary law can, be said to arise from the fact that constitutional laws are generally amend able under a process which in varying degrees, is more difficult or elaborate.
This may give a distinct character to the law of the Constitutionbut it does not serve to distinguish it from the other laws of the land for the purpose of article 13(2).
The Article itself does not exclude constitutional law which could have been easily done had the constitution makers.
so intended.
[862 B; 866 B] An amendment to the Constitution is not made under power derived ' from articles 245 or 248 of the Constitution read with entry 97 of List 1.
The power of amendment is sui generis.
[900 E] (iv) A narrow view need not be taken of the word amendment '.
By an amendment new matter may be added, old matter removed or altered.
The power of amending the Constitution is however not intended to be used for experiments or as an escape, from restrictions against undue State action enacted in the Constitution itself.
Nor is the power of amendment available for the purpose of remoing express or implied restrictions against the State.
[862 F; 863 B C] Coleman vs Milter, ; 307 U.S. 443 , Luther V. Borden,, and Baker vs Carr, 369 U.S. 186 ; , 633), referred to.
The State is no doubt supreme but in the supremacy of its powers it may create impediments on its own sovereignty.
There is nothing to prevent the State from placing certain matters outside the amending procedure.
When this happens the ordinary procedure of amendment ceases to apply.
Amendment can then only be by a freshly constituted body. 768 To attempt to do this otherwise is to attempt revolution which is to alter the will of the people in an illegal manner.
Courts can interfere to nullify the revolutionary change because there is an infraction of exiting legality.
Democracy may be lost if there is no liberty based on law and law based on equality.
The protection of the fundamental rights is necessary so that we may not walk in fear of democracy itself.
[863 G; 864 A C; 865 A D] (v) In article 13(2) the restriction is against the State.
There is a difference between the State and its agencies such as Government, Parliament, the Legislature of the States, and the local and other authorities.
The State means more than any of these or all of them put together.
By making the State subject to Fundamental Rights it is clearly stated in article 13(2) that any of the agencies acting alone or all the agencies acting together are not above the Fundamental Rights.
Therefore when the House of the People or the Council of States introduces a Bill for the abridgement of the Fundamental Rights, it ignores the injunction against it and even if the two Houses pass the Bill the injunction is next operative against the President since the expression Government of India in the General Clauses Act means the President of India.
Thus the injunction in article 13(2) is against the whole force of the State acting either in its executive or legislative capacity.
[866 E H] (vi) It is wrong to invoke the Directive Principles as if there is some antinomy between them and the Fundamental Rights.
The Directive Principles lay down the routes of State action but such action must avoid the restrictions stated in the Fundamental Rights.
It cannot be conceived that in following the Directive Principles the Fundamental Rights can be ignored.
[867 G, 868 B] (vii) Our Constitution has given a guaranteed right to the persons whose fundamental rights are affected to move the Court.
The guarantee is worthless if the rights are capable of being taken away.
This makes our Constitution unique and the American or other foreign precedents cannot be of much assistance.
[875 H] Hollingsworth vs Virginia, ; , Leser vs Garnett, ; , Dillon vs Gloss, ; and Texas vs White; , , referred to.
It is not that Fundamental Rights are not subject to any change or modification.
The Constitution permits a curtailment of the exercise of most of the Fundamental Rights by stating the limits of that curtailment.
It permits the Fundamental Rights to be controlled but prohibits their erasure.
[878 B] (viii) Parliament today is not the constituent body as the constituent 'assembly was but a constituted body which must bear true allegiance to the Constitution as by law established.
To change the Fundamental Part of the individuals liberty is a usurpation of the constituent functions because they have been placed outside the scope of the power of the constituted Parliament.
[870 B D] Our Constitution like some others has kept certain matters outside the amendatory process so that the their representatives.
In article 35 obstante clause.
They exclude Article under the proviso.
It is therefore a great error to think of article 368 as a code or as omnicompetent.
[901 C E; 902 A B] 769 Garnishee case; , , referred to.
Article 368 cannot directly be amended by Parliament to confer power on itself over the fundamental rights, It would be against article 13(2).
Parliament cannot do indirectly what it cannot do directly.
[878 H] (ix) If it is desired to abridge the Fundamental Rights the legal method is that the State must reproduce the power which it has chosen to put under restraint.
Parliament must amend article 368 to convoke another constituent assembly, pass a law under item 97 of the List 1 of Schedule 7 to call a constituent assembly, and then that assembly may be able to abridge or take away the fundamental rights.
Any other method must be regarded as revolutionary.
[878 D E; 879 B] (x) The various amendments that have been made by Parliament in articles 15, 16 and 19 did not abridge fundamental rights and were therefore valid.
[879 C, 883 B] (xi) Our Constitution accepted the theory that Right of Property is a fundamental right though perhaps it was an error to do so if socialisation was desired.
It treated property rights as inviolable except through law for public good and on payment of compensation.
However the various amendments have significantly changed the position.
As a result of them, except for land within the prescribed ceiling, all other land can be acquired or rights therein extinguished or modified without compensation and no challenge to the law can be made under articles 14, 19 or 31 of the Constitution.
[887 B; 888 B C; 896 F G] As there is apprehension that the erosion of the right to property may be practised against other fundamental rights it is necessary to call a halt.
An attempt to abridge or take away Fundamental Rights by a constituted Parliament even through an amendment of the Constitution can I declared void.
This Court has the power and the jurisdiction to do so.
The opposite view expressed in Sajjan Singh 's case was wrong. [898 B C] (xii) The First, Fourth and Seventh amendments of the Constitution, cannot now be challenged because of long acquiescence.
It is good sense and sound policy for the courts to decline to take up an amendment for consideration after a considerable lapse of time when it was not challenged before or was sustained on an earlier occasion after challenge.
[893 O, H 1902 D E] Lesser vs Garnett, ; (1922), referred to.
(xiii) In the Seventeenth Amendment, the extension of the definition of 'estate ' to include ryotwari and agricultural lands is an inroad into the Fundamental Rights but it cannot be questioned in view, of the existence of article 3 1A(1) (a) whose validity cannot now be challenged.
The new definition of estate introduced by the amendment is beyond the reach of the Courts not because it is not law but because it is "law" and fills within that word in article 31(1) (2) (2A) and article 3 1 A(1).
[899 C G] The third section of the Act is however invalid.
It adds 44 State Acts to the ninth schedule.
The Schedule is being used to give advance protection to legislation which is known or apprehended to derogate,from the Fundamental Rights.
The power under article 368 was not meant to give protection to State statute , which offend the Constitution.
The intent here is to silence the courts and not to amend the Constitution.
[900 A D] 770 (xiv) The two impugned Acts namely the Punjab Security of Land Tenures Act, 1953 and the Mysore Land Reforms Act, 1962 as amended are valid under the Constitution not because they are included in Schedule 9 of the Constitution but because they are protected by article 3 1 A and the President 's assent.
[902 G H] Per Wanchoo, Bachawat, Ramaswami, Bhargava and Mitter, JJ.
(dissenting): Article 368 carries the power to amend all parts of the Constitution including the fundamental rights in Part III of the Constitution.
An amendment is not 'law ' for the purpose of article 13(2) and cannot be tested under that Article.
Sri Sankari Prasad Singh Deo vs Union of India, ; and Sajjan Singh vs State of Rajasthan, ; , reaffirmed.
Per Wanchoo, Bhargava and Mitter, JJ. (i) The Constitution provides a separate part headed 'Amendment of the Constitution ' and article 368 is the only article in that Part.
There can therefore, be no doubt that the power to amend the Constitution must be contained in article 368.
If there was any doubt in the matter it is resolved by the words, namely, "the Constitution shall stand amended in accordance with the terms of the bill".
These words can only mean that the power is there to amend ,the Constitution after the procedure has been followed.
[826 A D] (ii) While there is a whole part devoted to the amendment of the Constitution there is no specific mention of the amendment of the Constitution in article 248 or in any entry of List 1.
It would in the circumstances 'be more appropriate to read the power in article 368 than in article 248 read with item 97 of List I. [826 H 827 A] The original intention of the Constitution makers was to give residuary power to the States.
The mere fact that during the passage of the Constitution by the Constituent Assembly residuary power was finally vested in the Union would not therefore mean that it includes the power to amend the Constitution.
Moreover residuary power cannot be used to change the fundamental law of the Constitution because all legislation is under article 245 "subject to the provisions of this Constitution".
[827 B, H] Mere accident of similarity of procedure provided in article 368 to that provided for ordinary legislation cannot obliterate the basic difference 'between constitutional law and ordinary law.
It is the quality and nature of what is done under article 368 and not its similarity to other procedure that should be stressed.
What emerges after the procedure in article 368 has been followed is not ordinary law but fundamental law.
[829 D; 830 C D] (iii) The procedure under the proviso to article III cannot apply to a 'bill to amend the Constitution.
If the President refused to, give his assent to such a bill , the proposed amendment falls.
In this respect at any rate the procedure under article 368 differs from, the ordinary legislative process.
[831 B E] (iv) The word 'law ' has been avoided apparently with great care in Art.368.
What emerges after the procedure has been followed is not an Act but the Constitution stands amended.
After that the courts can only see whether the procedure in article 368 was followed.
If it has been followed there is no question of testing the amendment of the Constitution On the avail of fundamental rights or in any other way as in the case of ordinary legislation.
[832 A G] 771 (v) To say that 'amendment ' in law only means a change which results in improvement would make amendment impossible for what is improvement is a matter of opinion.
[834 B] It may be open to doubt whether the power of amendment contained in article 368 goes to the extent of completely abrogating the present Constitution and substituting I it by an entirely new one.
But short of that the power to amend includes the power to add any provision to the Constitution to alter any provision and substitute any other provision in its place or to delete any provision.
[834 F G] The seventeenth amendment is merely in exercise of the power of amendment as indicated above and cannot be struck down on the ground that it goes beyond the power conferred by Parliament to amend the Constitution by article 368.
[834 H] (vi) There is no express limitation on power of amendment in article 368 and no limitation can or should be implied therein.
If the Constitution makers intended certain basic provisions in the Constitution, and Part III in particular, to be not amendable there is no reason why it was not so stated in article 3 68.
The acceptance of the principle that them is an implied bar to amendment of basic features of the Constitution would lead to the position that any amendment to any article would be liable to challenge before the courts on the ground that it amounted to amendment of a basic feature.
Constituent power like that in Art 368 can only be subject to express limitations so far as the substance of the amendments is concerned.
[835 A; 836 D, G] (vii) For interpreting article 369 it is not permissible to read the speeches made in the Constituent Assembly.
Historical facts namely what was accepted or what was not accepted or what was avoided in the Constituent Assembly can be looked into; but in connection with article 368 no help can be got from the historical material available.
[838 C] Administrator General, of Bengal vs Prem Lal Mullick, (1895) XXII I.A 107, Baxter vs Commissioner of Taxation, (1907) 4 C.I.R. 1087, A. K. Gopalan vs State of Madras [1950] S.C.R. 88 and The Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan, [1963] 1 S.C.R. 491, referred to.
(viii) The preamble to the Constitution cannot prohibit or control in any way or impose any implied restrictions or limitations on the power to amend the Constitution contained in Aft. 368.
[838 H] In re the Berubari Union and Exchange of Enclaves, , referred to.
(ix) The word 'law ' in article 13(1) does not include.
any law in the nature of a constitutional.provision for no such law remained in view of article 395 which provided that "the Indian Independence Act, 1947 and the Government of India Act, 1935, together with all enactments amending or supplementing the latter Act, but not including the Abolition of Privy Council Jurisdiction Act, 1949, are hereby repealed.
There is no reason why if the word 'law ' in article 13(1) relating to past laws does not include any constitutional provision the word 'law ' in cl.
(2) would take in an amount of the Constitution for it would be reasonable to read the word in the same sense in both the clauses.
[839 D F] Article 13 (2) when it talks of the State making any law, refers to the law made under the provisions contained in Ch.
1 of Part XI of the Constitution beginning with article 245.
It can have no reference to the 772 Constituent power of amendment under article 368.
For it is somewhat contradictory that in article 368 power should have been given to amend any provision of the Constitution without any limitations but indirectly that power should be limited by using words of doubtful import in article 13(25.[841 C] The power conferred by the words of article 368 being unfettered, inconsistency between.
that power and the provision in article 13(2) must be avoided.
Therefore in keeping with the unfettered power in article 368 the word 'law ' in article 13(2) must be read as meaning law passed under the ordinary legislative power and not a constitutional amendment.
The words in article 13(2) are not specific and clear enough to be regarded as an express limitation on article 368.
[842 G H] (x) Merely because there was some indirect effect on article 226 it was not necessary that the Seventeenth Amendment should have been ratified under the proviso to article 368.
article 245 had not also been directly affected by the said Act and no ratification % as required on this ground either.
[843 G H; 846 C] (xi) The laws added to the Ninth Schedule by the Seventeenth Amendment Act had already been passed by the State Legislatures and it was their constitutional infirmity, if any, which was being cured by the device adopted in article 31B read with the Ninth Schedule, the amendment being only of the relevant provisions of Part III which were compendiously put in one place in article 31B.
Parliament could alone do it under article 368 and there was no necessity for any ratification under the proviso, for amendment of Part HI is not entrenched in the proviso.
[847 E] In curing the infirmity of the said laws Parliament was not encroaching on the exclusive legislative powers of the States because only Partiament could card the infirmity.
For the same reason the fact that the laws in question were State laws did.
not make ratification obligatory. [847 G] A limited meaning cannot be given to Art, 368 because of the possibility of abuse of the power.
The check is not in the courts but in the people who plect members of Parliament.
[848 F] The power of amendment contained in a written federal constitution is a safety valve which to a large extent provides for stable growth and makes violent revolution more or less unnecessary.
The fact that in the last sixteen years a large number of amendments , could be made and have been made is due to the accident that one party has been returned by electors in sufficient strength to be able to command Special majorities which are required in article 368, not only at the Centre but in all the States.
But that is no ground for limiting the clear words of article 368.
[850 C D, E] (xii)Though the period for which Sankari Prasad 's case has stood unchallenged is not long, the effects which have followed on the passing of State laws on the faith of that decision, are so overwhelming that the decision should not be disturbed otherwise chaos will follow.
This is the fittest possible case in which the principle of stare decisis should be applied [851 G] Keshav Mills: Company, Ltd V Commissioner of Income tax; , , referred to.
(xii)The doctrine of prospective overruling cannot be accepted in this country.
The doctrine accepted here is that courts declare law and that a declaration made by a court is the law of the land and takes effect 773 from the date the law came into force.
It would be undesirable to give up that doctrine and supersede it with the doctrine of prospective overruling.
[852,D F] Moreover a law contravening article 13(2) is void ab initio as held by this Court in Deep Chand 's case and Mahendra Lal Jaini 's case.
In the face of these decisions it is impowible to apply the doctrine of prospective overruling to ordinary laws.
If constitutional law is to be treated as ordinary law the same principle applies.
If however it is not treated as 'law ' under article 13(2) then there is no necessity of applying the principle of prospective overruling for in that case the amendment under article 368 does not have to be tested under article 13(2).
[852 G H; 853 B] Deep Chand vs St ate of Uttar Pradesh, [1959] Supp. 2 S.C.R. 8 and Mahendra, Lal Jaini vs State of Uttar Pradesh, [1963] Supp. 1 S.C.R. 912, referred to.
Per Bachawat J. (i) Article 368 not only prescribes the procedure but also gives the power of amendment.
It is because the power to amend is given by the article that by following its procedure the Constitution stands amended.
The proviso is enacted on the assumption that the several articles mentioned in it are amendable; but for the proviso they would have been amendable under the main part.
There is no other provision in the Constitution under which these articles ' can be amended.
[904 D] Articles 4, 169, Fifth Schedule Part D and Sixth Schedule Para 21 empower the Parliament to make amendments to certain parts of the Constitution by law, and by, express provision such law is deemed not to be amendment for the purpose of article 368.
All other provisions of the Constitution can be amended by recourse to article 368 only.
No other article confers the power of amending the Constitution.
[904E F] (ii) The power to amend the Constitution cannot be said to reside in article 248 and List 1, item 97 because if amendment could be made by ordinary legislative process article 368 would be meaningless.
Under the residual power the Parliament has no competence to make any law with respect to any matter enumerated in Lists II and III of the 7th Schedule, but under article 368 even Lists 11 and III can be amended.
Moreover a law passed by residual power is passed by virtue of article 245 and must be subject to the provisions of the Constitution so that it cannot derogate from the Constitution or amend it.
Such a law would be void.
[905 C P] (iii) Article 368 gives the power of amending 'this Constitution '.
This Constitution means every part of the Constitution including Part ITT and article 13(2).
Thus article 13(2) is also within the reach of the amending power.
Instead of controlling article 368 it is controlled by that Article.
[906 C D; H] (iv) The contention that a constitutional amendment under article 368 is a law within the meaning of article 13 must be rejected.
The distinction between the Constitution and law is so fundamental that the Constitution is not regarded as a law or a legislative act.
The Constitution mean , the Constitution as amended.
An amendment made in conformity with article 368 is a part of the Constitution and is likewise not law.
Save as expressly provided in articles 4, 169 Fifth Schedule Part D and Sixth Schedule para 21 no law can amend the Constitution and a law which purports to make such an amendment is void.
It is for this reason that article 368 avoids all reference to law making by the Parliament.
There 3 Sup.
CI./67 4 774 are.
also material differences between the ordinary law making procedure and the procedure under the Article.
[907 B F; 908 D H] If a constitutional amendment creating a new fundamental rights and incorporating it in Part III were a law, it would not be open to the Parliament by a subsequent amendment to abrogate the new fundamental right for such an amendment would be repugnant to Part 111.
But the conclusion is absurd for the body which enacted the right can surely take it away by the same process.
[909 E] Marbury vs Madison, ; :2 L.Ed. 60 and Riley vs Carter, , referred to.
(v) There is no conflict between articles 13(2) and 368.
The two articles operate in different fields, the former in the field of law, the latter in that of constitutional amendment.
[910 B] (vi) The non obstante clause in article 35 does not show that the article is not amendable.
The non obstante clause is to be found also in, articles 258(1).
364, 369, 370 and 371A.
No one has suggested that these articles are not amendable.
[910 D] (vii) The words 'fundamental ' used in regard to rights in Part III and the word guaranteed in article 32 do not mean that the said rights cannot be amended.
The constitution is never at rest; it changes with the progress of time.
The scale of values in Parts III and IV is not immortal and these Parts being parts of the Constitution are not immune from amendment under article 368.
[910 F G] The impugned amendments to be Constitution were made to meet the situations created by decisions of this Court and to carry out urgent agrarian reforms.
If it is held that the rights, conferred by Part III cannot be abridged or taken away by constitutional amendments, all these amendments would be invalid.
The Constitution makers could not have intended that the ' rights conferred by Part III could not be altered for ' giving effect to the policy of Part.
Nor was it intended that defects in Part III could not be cured or that possible errors in judicial interpretations of Part III could not be rectified by constitutional amendments.
[913 D E] (viii) It cannot be said that the people in exercise of their sovereign power have placed the fundamental rights beyond the reach of the amending power.
The people acting through the Constituent Assembly reserved for themselves certain rights and liberties and ordained that they shalt not be curtailed by ordinary legislation.
But the people by the same Constitution also authorised the Parliament to make amendments to the Constitution.
In exercise of the amending power the Parliament has ample authority to, abridge or take away the fundamental rights under Part III [915 B C] Merely because of possibility of abuse, the power cannot be denied.
[916 H] Webb vs Outrim, and amalgamated Society of Engineers '.
The Adelaide Steamship Company Limited & Ors. ; , referred to.
(ix) The main part of article 368 gives the power to amend or make changes in the Constitution.
A change is not necessarily an improvement.
Normally the change is made with the object of making an improvement but the experiment may fail to achieve the purpose.
[916 A] Livermore vs E. G. Waite, L.R.A. 312 and National Prohibition case.
; , referred to.
77 5 (x) The best exposition of the Constitution is that which it has received from contemporaneous judicial decisions and enactments.
No one in Parliament doubted the proposition that fundamental rights could be amended, when the First Amendment Act of 1951 was passed.
The concept of amendability was upheld in section Krishnan & Ors.
vs State of Madras ; decided in 1951, 'in Sankari Prasad decided in 1952 and Sajjan Singh decided in 1964.
[918 C D] (xi) There is no provision in the Constitution for calling a convention for its revision or far submission of any proposal for amendment to the referendum.
[918 G] (xii) The impugned amendments affected articles 226 and 245 only indirectly and did not require ratification under the proviso to article 168.
[919 D H] In validating the impugned laws Parliament was not encroaching on .the State List.
It was only validating the said laws and such constitutional validating was within its competence.
[920 C E] (xiii) The abolition of Zamindari was a necessary reform.
It is the First Constitution Amendment Act that made this reform possible.
, No legal argument ' can restore the outmoded feudal Zamindari system.
What has been done cannot be undone.
The battle for the put is lost.
[921 B C] If the First Fourth, Sixteenth & Seventeenth Amendments Acts are void they do not legally exist from their inception.
They cannot be, valid from 1951 to 1967 and invalid thereafter.
To say that they were valid in the past and Will be invalid in the future is to amend the.
Constitution.
Such a naked power of amendment is not given to the Judges and therefore the doctrine of prospective overruling cannot be, adopted.
[921 D E] It is not possible to say that the First and Fourth Amendments though originally valid have now been validated by acquiescence.
If they infringe article 13(2) they were void from their inception.
If these ammendments are validated by acquiescence the Seventeenth Amendment is equally validated.
B] (xv) The contention that Dr. Ambedkar did not regard the fundamental rights as amendable is not supported by the speeches in the ' Constituent Assembly.
[922 C D] Per Ramaswami J.(i) In a written Constitution the amendment of the Constitution is a substantive constituent act which, is made in the exercise of the sovereign power through a predesigned procedure unconnected with ordinary legislation.
The amending power in article 368 is hence sui generis and cannot be compared to the law making power of Parliament pursuant to article 246 read with Lists II and Ill. It follows that the expression 'law ' in article 13(2) cannot be construed as including an amendment of the Constitution which is achieved by Parliament in exercise of its sovereign constituent power but must mean law made by Parliament in its legislative capacity under article 246 read 'with I List I and III of the 7th Schedule.
It is also clear on the same line of reasoning that law in article 13(2) cannot be construed so as to include "law ' made by Parliament under articles 4, 169, 392, 5th Schedule Part 1 and 6th Schedule para 21.
The amending power of Parliament exercised under these Articles stands on the same pedestal as the constitutional amend ment made under article 368 so far as article 13(2) is concerned.
[930 H 931 E] (ii) The language of article 368 is perfectly general and empowers Parliament to amend the Constitution without any exception whatsoever.
776 The use of the word 'fundamental ' to describe the rights in Part III and the word 'guaranteed ' in article 32 cannot lift the fundamental rights above the Constitution itself [931 F, H] (iii) It is unreasonable to suggest that what article 368 provides is only the mechanics of the procedure for amendment and not the power to amend.
The significant fact that a separate part has been devoted in the Constitution for "amendment of the constitution" and there is only one Article in that Part shows that both the power and the procedure to amend are enacted in article 368.
Again the words "the Constitution shall stand amended in accordance with the terms of the Bill" in article 368 clearly contemplate and provide for the power to amend after the requisite procedure has been followed.
[932 C E] (iv) The power of constitutional amendment cannot fall within articles 246 and 248 read with item 97 of List I because it is illogical and a contradiction in terms to say that the amending power can be exercised "subject to the provisions of the Constitution" as the power under these articles must be.
[933 B] (v) There is no room for an implication in the construction ofArt.
If the Constitution makers wanted certain basic features to be unamendable they would have said so.
[933 G H] State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 and In re The Berubari Union and Exchange of Enclaves , referred to.
The concepts of liberty and equality are changing and dynamic and hence the notion of permanency or immutability cannot be attached to any of the fundamental rights.
The adjustment between freedom and compulsion, between the rights of individuals and the social interest and welfare must necessarily be a matter for changing needs and conditions.
The proper approach is therefore to look upon the fundamental rights of the individual as conditioned by social responsibility, by the necessities of the society, by the balancing of interests and not as pre ordained and untouchable private rights.
[934 E 935 C] (vi) It must not be forgotten that neither the rights in article 31 nor those in article 19 are absolute.
The purposes for which fundamental rights can be regulated which are specified in cls.
(2) to (6) could not have been assumed by the Constitution makers to be static and incapable of expansion.
It cannot be assumed that the Constitution makers intended to forge a political strait jacket for generations to come.
Today at a time when absolutes are discredited, it must not be too readily assumed that there are basic features of the Constitution which shackle the amending power and which take precedence over the general welfare of nation and the need for agrarian and social reform.
[936 B 937 C] (vii) In construing article 368 it is essential to remember the nature and subject matter of that Article and to interpret it subjectae materies.
The power of amendment is in point of quality an adjunct of sovereignty.
It is in truth the exercise of the highest sovereign power in the State.
if the amending power is an adjunct of sovereignty it does not admit of any limitations.
[937 D] (viii) If the fundamental rights are unamendable and if article 368 does not include any such power it follows that the amendment of, say, article 31 by insertions of articles 31A and 31B can only be made by a violent revolution.
It is doubtful if the proceedings of a new Constituent Assembly that may be called will have any legal validity for if the 777 Constitution provides its own method of amendment, any other method will be unconstitutional and void.
[490 A B] George section Hawke vs Harvey C. Smith, ; and Feigenspan vs Bodine, , referred to.
(ix) It is not permissible in the first place to assume that in a matter of constitutional amendment there will be abuse of power and then utilise it as a test for finding out the scope of the amending power.
In the last analysis political machinery and artificial limitations will not protect the people from themselves.
[941 F G] State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 and American Federation of Labour vs American Sash & Door Co. ; , referred to.
(x) What the impugned Act purports to do is not to make any and legislation but to protect and validate the legislative measure passed by different State legislatures.
This was within the legislative competence of Parliament.
[942 F] Leser vs Garnett, ; , National Prohibition Cases. ; and United States vs Sprague, ; , referred to.
Articles 226 and 245.
were not directly affected by the impugned Act and therefore no ratification by the State Legislatures was necessary.
[942 D H; 945 D] A. K. Gopalan vs State of Madras, ; , Ram Singh & Ors.
vs State of Delhi & Anr.
, ; , Express Newspapers (Pvt.) Ltd. vs Union of India, , Atiabari Tea Co. Ltd. vs State of Assam, ; and Naresh Shridhar Mirajkar vs State of Maharashtra ; , referred to.
(xi) Even on the assumption that the impugned Act is unconstitutional the principle of stare decisis must be applied to the present case and the plea made by the petitioners for reconsideration of Sankari Prasad 's case and Sajjan Singh 's case must be rejected.
[948 D E] On the landings it was not necessary to express an opinion on the doctrine of prospective overruling of legislation. |
Appeals Nos. 130 and 131 of 1951.
Appeals from.
the Judgment and Decrees, dated the 12th August, 1948, of the High Court of Judicature at Calcutta in Appeals from Original Decrees Nos.
214 of 1942 and 231 of 1943 arising from the Decrees, dated the 16th June, 1942, of the Court of the Subordinate Judge, Burdwan, in Money Suit No. 261 of 1932/ Miscellaneous Case No. 132 of 1941 and Money Suit No. 262 of 1932/Miscellaneous Case No. 131 of 1941.
N. C. Chatterjee (A. K. Dutt and Sukumar Ghose, with him) for the appellant.
Manmohan.
Mukherjee and P. K. Chatterjee for respondent No. 1. 989 1954.
March 12.
The Judgment of the Court was delivered by MUKHERJEA J.
These two analogous appeals, which are between the same parties and involve the same points in dispute, are directed against a common judgment of a Division Bench of the Calcutta High Court dated the 12th of August, 1948, by which the learned Judges affirmed, in appeal, the decision of the Subordinate Judge of Burdwan passed in two analogous proceedings under section 36 of the Bengal MoneyLenders Act.
The facts material for our present purpose lie within a narrow compass and may be stated as follows: The principal respondents are certain idols, represented by their managing Shebait Ram Govinda Roy.
The idols are the family deities of the Roys of Bonpash in the district of Burdwan, and the number of Shebaits being very large, there is a recognised usage in this family that the seniormost member amongst the descendants of the founder acts as the managing Shebait and it is he who manages the endowed properties and looks after the due performance of the worship of the idols.
It is not disputed by the parties that it is within the competence of the managing Shebait to borrow money to meet the necessities of the idols and to execute such documents as may be necessary for that purpose.
Admittedly Adwaita Charan Roy was the managing Shebait of the deities from 1926 to 1930 and as Shebait, he executed a Hatchita in favour of one Nanitosh Chakraborty some time in April, 1928, on the basis of which he received advances of money from time to time from the latter.
The last entry in the Hatchita was made in March, 1929, and the total amount borrowed up to that date came up to Rs. 3,801.
Adwaita died in March, 1930, and after his death, Satish Chandra Roy became the managing Shebait and continued to act as such till his death in 1940.
There was an adjustment of accounts between Nanitosh, the creditor,in whose favour the Hatchita was executed, and Satish Chandra, the managing Shebait some time in October, 1931, and a sum of Rs. 5,068, having been found due to the 128 990 creditor, Satish Chandra gave him a renewed Hatchita for that amount.
It appears that while Adwaita was still the managing Shebait, a suit was instituted by some of his co Shebaits to remove him from his office and pending the hearing of the suit, Ramjanaki Roy, another co Shebait, was appointed a Receiver of the debutter property by the court.
With the permission of the court, Ramjanaki borrowed from the same Nanitosh Chakraborty three sums of money on three different promissory notes executed respectively on the 27th September, 1929, 1st October, 1929, and 14th January, 1930.
The suit was eventually dismissed for non prosecution after Adwaita 's death.
Nanitosh died in 193 1, and in 1932) his two sons Aditya and Dhirendra, who figure as respondents 14 and 15 in these appeals, instituted two money suits against Satish Chnandra, the managing Shebait, in the Court of the Subordinate Judge, Burdwan, being Money Suits Nos. 261 and 262 of 1932, for recovery of the moneys due in respect of the Hatchita and the promissory notes mentioned aforesaid.
Both the suits were decreed on the basis of a compromise dated the 23rd July, 1933, and two consent decrees were passed, one for a sum of Rs. 5,800, and the other for Rs. 2,200, both payable in sixteen yearly instalments with a further stipulation that in default of payment of any one of the instalments, the whole or balance of the decretal amount would become due and payable in each.
The instalments not having been paid in either of the cases both the decrees were put into execution.
In Execution Cases Nos. 76 and 77 of 1936, arising out of Money Suits Nos. 261 and 262 of 1932, the properties mentioned in Schedule Ka in each case were put up to sale and they were purchased ostensibly by the two decreeholders Aditya and Dhiren.
Three years later, Execution Cases Nos. 17 and 18 of 1939 were started again in connection with the said decrees and this time the properties specified in Schedule Kha were attached and put up to sale and they were also purchased by the Chakraborty decreeholders.
Finally, in Execution Cases Nos. 163 of 1939 and 5 of 1940, the properties described in Schedule GA were sold and 991 they were, knocked down to Srimati Oramba Sundari Dasi, who figures as the appellant in the appeals before us and who, it may be noted, is the wife of Aghore Nath Roy, a son of Adwaita, the former managing Shebait of the debutter estate.
Subsequently, the decreeholders, who purchased Ka and Kha Schedule properties sold them by a registered Kobala to the said Oramba Sundari Dasi on the 26th of July, 1940.
The result, therefore, was that the properties described in the three Schedules came to vest in Oramba Sundari, the wife of Aghore Nath Roy.
On the 28th August, 1941, the deities represented by some of the Shebaits filed two applications under section 36 (6) (a) (ii) of the Bengal Money Lenders Act praying for the reopening of the two compromise decrees mentioned aforesaid and the passing of.
new installment decrees in accordance with the provisions of the Act.
There were prayers also for restoration.
to the deities of all the properties mentioned in Schedules, Ka, Kha and Ga which were purchased in execution of the decrees.
The principal opposite parties to these proceedings were the Chakraborty decreeholders, Oramba Sundari, the ostensible purchaser, and Aghore Nath Roy, her husband.
The allegations in the applications, in substance, were that the Chakrabortys were mere benamidars for Aghore Nath Roy, who was the real lender and the real decreeholder in both these suits.
It was alleged that Aghore Nath Roy purchased these properties in the benami of the decreeholders in two out of the three execution proceedings and in the benami of his wife Oramba Sundari in the third.
The subsequent Kobala executed by the Chakrabortys in favour of Oramba .
Sundari was also asserted to be a fictitious conveyance made in favour of Aghore Nath Roy in the name of his wife.
In these circumstances, the judgment debtors prayed that they were entitled to have the two compromise decrees reopened and on the passing of new instalment decrees to have the properties, which were in possession of the real decreeholder, restored to the deities in terms of section 36(2)(c) of the Bengal Money Lenders Act.
The trial judge decided 992 in favour of the judgment debtors and granted their prayers in both the applications.
Orders were made for reopening of the decrees and making of fresh decrees in their places in accordance with the provisions of the Bengal Money Lenders Act.
Direction was also given for restoration of the properties mentioned in Schedules Ka, Kha and Ga to the deities under the provision of section 36(2)(c).
Against this decision, Oramba Sundari took two appeals to the High Court of Calcutta and the learned Judges, who heard the appeals, affirmed the decision of the court below and dismissed both the appeals.
Oramba Sundari has now come up in appeal to this court on the strength of a certificate given by the High Court under sections 109 (a) and 110 of the Civil Procedure Code.
Mr. Chatterjee who appeared in support of the appeals, has not challenged before us the findings of fact concurrently arrived at by the courts below, viz.
,that the appellant Oramba Sundari was a mere benamidar for her husband Aghore in respect of the purchase of Ga Schedule properties in court sale, and also that the Kobala executed by the Chakrabortys in her favour on July 26, 1940, was a fictitious transaction.
The point, which he has pressed for our consideration, is that in a proceeding under section 36 of the Bengal Money Lenders Act, it is not open to the court to go behind the decree and launch an enquiry as to whether the decreeholders on record were in fact benamidars for another person.
In other words, the contention is that, even if Aghore was proved to have advanced the money upon which the Chakrabortys obtained the decrees, in reopening the decrees and in working out the rights of the parties in accordance with the provisions of the Bengal Money Lenders Act the court could treat the Chakrabortys alone as the decreeholders.
For a proper determination of this point, it is necessary to examine the scope of section 36 of the Bengal Money Lenders Act and the reliefs which the Court is competent to grant in terms of that section.
Section, 36 of the Bengal Money Lenders Act sets out the various powers which the court can exercise, 993 if it has reason to believe that the exercise of one or more of the powers will give relief to the borrower as contemplated by the Act; and one of the powers, which is mentioned in clause (a) of sub section (1) of the section is to reopen any transaction and take an account between the parties.
The drafting of section 36 is indeed obscure and somewhat clumsy, but it is clear, as the Privy Council (1) has pointed out, that the power of reopening a transaction, as contemplated by the section, extends to reopening of decrees as well.
Sub section (2) of section 36 contains detailed provisions as to what the court may or may not do when a decree is reopened.
It cannot be disputed that the court reopens a decree under section 36(2) only for the purpose and so far as it is necessary to give relief to the borrower in the manner provided for in the Act, namely, to release him from all liability for interest in excess of the limits prescribed by section 30 of the Act.
A new decree is passed only for the purpose of substituting the method of accounting sanctioned by the Act for the calculations upon which the original decree was passed and to give an opportunity to the judgment debtor to pay the decretal dues thus ascertained by instalments.
But save and except for these, the old decree as well as the adjudications made thereunder are not wiped out and the parties are not relegated to their rights and liabilities under the original cause of action (2).
How the rights of the parties are to be adjusted and worked out when a decree hat; been reopened has been dealt with exhaustively in the several clauses of section 36 (2) of the Bengal Money Lenders Act, and an examination of these clauses makes it clear to our minds that an enquiry as to whether the decree holder was in fact a benamidar for another person in respect of the decree, does not come within the purview of these provisions.
Clause (a) of section 36(2) empowers the court to pass a new decree in accordance with the provisions of the Act.
Obviously, this new decree is to be passed in favour of the original decreeholder and only the calculations upon which the old (1) Vide Renula vs Manmatha, 72 I.A. 156.
(2) Vide Bank of Commerce Ltd. vs Amulya Krishna Babu Roy Chowdhury 994 decree was based would be changed by substituting the statutory method of accounting in place of what rested upon the contract between the parties.
Clauses (b) and (C) contemplate cases where properties have been sold in execution of the original decree.
If the purchaser is the decreeholder, himself and he is in possession of the property when the decree is reopened, it is incumbent upon the court to order restoration of these properties to the judgment debtor under clause (c).
If, on the other hand, the properties had been acquired by strangers either by purchase at the execution sale or from the decreeholder purchaser, their interests would be protected if they have acquired these rights bona fide as contemplated by clause (b).
Under clause (d), the court has to order the payment of the decretal amount in such instalments as it thinks proper, and clause (e) further imposes a duty on the court to give a direction in such cases that if there is default in the payment of any one of the instalments, the properties restored to the judgment debtor under clause (e) would be put back into the possession of the decreeholder.
It is quite true that the object of restoring possession of the properties sold in execution of the decree to the judgment debtor is to enable the latter to pay off the decretal dues, but it is to be remembered that the sale itself is not annulled, and in case of default in payment of any of the instalments, the properties are returned to the decreeholder purchaser.
We agree that if the purchaser is a mere benamidar for the decreeholder, clause (b), subsection (2) of the section would not afford protection to him in any way.
He could not be regarded as a person other than the decreeholder acquiring rights bona fide as contemplated by that clause.
For the purpose of giving effect to clauses (b) and (c), therefore, the court has not only the right but is under a duty to make an enquiry as to whether the ostensible purchaser at the execution sale, or the person who purports to have acquired an interest therein under a subsequent transfer from the decreeholder purchaser, has bonafide acquired such rights within the meaning of clause (b).
But we do not agree with the learned 995 Judges of the High Court that in making a new decree under clause (a) of section 36(2) and giving the judgment debtor consequential relief under clause (c) of the sub section, the court can at all enter into the question as to whether the decreeholder on record is himself a benamidar for another person in respect of the decree.
Such enquiry, it seems to us, is altogether outside the purview of the different clauses of section 36(2) of the Bengal Money Lenders Act.
These provisions do not recognise any other decreeholder than the one in whose favour the original decree was passed.
It is between him and the judgment debtor that the rights are to be adjusted in accordance with the provisions of the Act; to him would the instalments have to be paid under the new decree, and he alone would be compelled to restore the properties which he had purchased in execution proceedings.
None but the decreeholder on record can give a valid discharge or record satisfaction of the decree.
This being the position, it is altogether immaterial, in our opinion, that it was Aghore, the husband of the appellant, who, really advanced the money upon which the decrees were obtained.
We must treat the Chakrabortys and the Chakrabortys alone as the decreeholders and see to what extent the provisions of the Act could be applied against them in the circumstances of the present case.
So far as the properties described in Schedules Ka and Kha are concerned, it is not disputed that they were purchased by the decreeholders themselves.
No price was actually paid by the decreeholders, but the sale proceeds were set off against the decretal dues.
The decreeholders, therefore, must be deemed to be the purchasers of these properties within the meaning of clause (c) of section 36(2); and as the subsequent conveyance of these properties in favour of Oramba Sundari, the appellant, has been held by both the courts below to be a fictitious transaction, we must hold that Oramba Sundari did not bona fide acquire any right which could be protected under clause (b) of section 36(2).
With regard to these properties, therefore, the order for restoration of possession made by both the courts below should stand.
As regards Ga 996 Schedule properties, however, Oramba Sundari was the purchaser at the execution sale and whether or not the money for such purchase was paid by her husband becomes immaterial.
This was not the property purchased by the decreeholders and there is no proof of the decreeholders being in possession of the same either by themselves or through Oramba Sundari.
In these circumstances, clause (e) of section 36(2) cannot be attracted in favour of judgment debtors so far as this property is concerned and the possession of it must remain with the appellant.
We, therefore, allow the appeal in part and set aside the order for restoration of possession made by the courts below in respect to the Ga Schedule property.
The rest of the decision of the High Court will stand.
We make no order as to costs of these appeals.
Appeal partly allowed. | Held, that in a proceeding under section 36 of the Bengal Money Lenders Act, 1940, it is not competent to the court to go behind the decree and embark on an enquiry as to whether the decree holders on record were in fact benamidars for another person.
Scope of section 36 of the Act discussed.
Renula vs Manmatha (72 I.A. 156) and Bank of Commerce Ltd. vs Amulya Krishna Basu Boy Chowdhury ([1944] F.C.R. 126) referred to. |
Appeal No. 1230 of 1966.
Appeal by special leave from the judgment and order dated August 27, 1962 of the Bombay High Court in Income tax Re ference No. 18 of 1961.
section T. Desai, M. N. Shroff for 1.
N. Shroff, for the appellant.
R. M. Hazarnavis, Gopal Singh, section P. Nayyar for R. N. Sachthey, for the respondent.
239 The Judgment of the Court was delivered by Ramaswami J.
This appeal is brought, by special leave, from the judgment of the High Court of Bombay dated August 27, 1962 in Income Tax Reference No. 18 of 1961.
The appellant is an individual having income from House Property, Government Securities, Cinema Exhibition and financing film producers and distributors.
During the period from March 3, 1952 to November 5, 1952 the appellant advanced a sum of Rs. 40,000/ to a firm of film distributors known as Tarachand Pictures.
The appellant thereafter entered into an agreement dated January 5, 1953 with Tarachand Pictures under which the appellant advanced a further sum of Rs. 60,000/ in respect of the distribution, exploitation and exhibition of a picture called "Shabab".
According to cl. 2 of the agreement the distributors were to pay a lumpsum of Rs. 1,750/ by way of interest on the initial advance of Rs. 40,000/ .
Clause 3 of the agreement read as follows : "No interest will run henceforth on this sum of Rs. 40,000/ as also on the advances to be made as provided hereinabove but in lieu of interest it is agreed that the Distributors will share with the Financier profit and loss of the Distribution, Exploitation and Exhibition of the picture SHABAB in the Bombay Circuit, two third going to the Financier and one third to the Distributors.
" Clauses 4 and 5 were to the following effect "4.
The Distributors shall on or before the 15th of every month submit to the Financier a Statement of Account of the business done during the previous month in respect of the picture 'SHABAB ' in the territories of Bombay Circuit.
The Distributors shall keep the proper accounts of the business of the picture 'SHABAB ' and the same as well as all documents, reports and contracts will be available to the Financier or his agent for inspection.
" Clause 7 read as follows: "In case the picture is not released in Bombay within 15 months from the date hereof the Distributors shall be bound to immediately return all the moneys so far advanced to the Distributors by the Financier.
In that event the Distributors shall be bound to return all the moneys together with interest thereon @ 9% per annum.
" Clause 8 stated: "In case of any breach being committed by the Dis 240 tributors of any of the terms herein provided this agreement shall at once terminate and the moneys paid by the Financier shall be at once repaid by the Distributors to the Financier with interest @ 9% per annum." It appears that the distributors were not in a position to exhibit the film in Bombay within the stipulated time.
When the film was ultimately released for exhibition it proved to be unsuccessful.
The matter was taken to the City Civil Court and ultimately a consent decree was obtained in Suit No. 2061 of 1954 in the Bombay City Civil Court.
In the end the appellant found that there was a balance of Rs. 80,759/ which was irrecoverable and he accordingly wrote it off as a bad debt on December 31, 1955 in the ledger account.
For the assessment year 1956 57, the corresponding previous year being the calendar year 1955, the appellant claimed a loss of Rs. 80,759/ which he had written off as bad debt, under section 10(2)(xi) of the Income tax Act.
By his assessment order dated July 31, 1957, the Income tax Officer disallowed the claim on the ground that the moneys advanced by the appellant under the agreement could not be regarded as a dealing in the course of his financing business, but the true nature of the transaction, as evidenced by the agreement, was a venture in the nature of a trade.
The Income tax Officer accordingly held that the loss was a capital loss and it could not be allowed as a bad debt under section 10(2)(xi) of the Income tax Act.
The appellant took the matter in appeal to the Appellate Assistant Commissioner of Income tax who dismissed the appeal.
The appellant preferred a second appeal before the Income tax Appellate Tribunal which by its order dated February 19, 1960 rejected the appeal, holding that the loss of Rs. 80,759/ was a capital loss and not a loss of stock in trade.
The Tribunal took the view that the transaction was not a joint venture with the distributors or any partnership business and that it was also not a mere financing deal or a part of the money lending activities of the appellant.
According to the Appellate Tribunal, the true nature of the transaction was an investment of the capital for a return in the shape of share of profits, and the loss suffered by the appellant was therefore a capital loss and not a revenue loss.
As required by the appellant, the Tribunal stated a case to the High Court under section 66(1) of the Income tax Act on the following question of law: "Whether the aforesaid loss of Rs. 80,759/ is deductible under any of the provisions of the Act ?" By its judgment dated August 27, 1962, the High Court answered the Reference in the negative and against the appellant.
On behalf of the respondent it was submitted that the High Court was right in taking the view that the appellant had advanced 241 a sum of Rs. 1,00,000/ not with a view to earn interest thereon but with a view to making an investment in the business of Tarachand Pictures and get a return on the said investment by way of a share of profits in the said business.
It was contended that the money was not lent for any definite term and no rate of .interest had been fixed under cl. 3.
The argument was also, stressed that cl. 3 of the agreement stipulated that the appellant was to share with the distributors not only the profit but also the loss of the business, and in the case of no money lending transaction is there a covenant between the parties that the money lender will share the loss of the business for which the money is lent.
In other words, it was argued that no money lending transaction can have the attribute of the money lender sharing the risk of the loss of the business for which the money is lent, nor could it be a feature of any purely financial deal.
We are unable to accept the argument of the respondent that the transaction between the parties under the agreement dated January 5, 1953 was not a money lending transaction or a transaction in the nature of a financial deal in the course of the appellant 's business.
If cl. 3 of the agreement is taken in isolation there may be some force in the contention of the respondent that the term under which the appellant undertook to share the loss took the transaction out of the category of a money lending transaction and the loss suffered by the appellant was therefore a capital loss.
In the present case, however, cl. 3 of the agreement dated January 5, 1953 cannot be read in isolation but it must be construed in the context of cl. 7 which provides that in case the picture was not released in Bombay within 5 months from the date of the agreement, the distributors will return all the moneys so far advanced to them by the appellant together with interest thereon at 9% per annum.
It is the admitted position in the present case that the picture was not released by ,the distributors till the stipulated date, namely, April 4, 1954 but it was released on May 28, 1954 and cl. 7 of the agreement there fore came into operation.
The result therefore is that on and from April 4, 1954 there was a contract of loan between the parties in terms of cl. 7 of the agreement and the principal amount became repayable from that date to the appellant with interest thereon at 9% per annum.
It follows therefore that the appellant is entitled to claim the amount of Rs. 80,759/ as a bad debt under section 10(2) (xi) of the Income tax Act and the loss suffered by the appellant was not a loss of capital bat a revenue loss.
To find out whether an expenditure is on the capital account or on revenue account, one must consider the expenditure in relation to the business.
Since all payments reduce capital in the ultimate analysis, one is apt to consider a loss as amounting to a loss of capital.
But it is not true of all losses, because losses in the running of the business cannot be said to be of capital.
The distinc 242 tion is brought out for example, in Reid 's Brewery Co. Ltd. vs Male(1).
In that case, the brewery company carried on, in addition to the business of a brewery, a business of bankers and moneylenders making loans and advances to their customers.
This helped the customers in pushing sales of the product of the brewery company.
Certain sums bad to be written off and the amount was held to be deductible.
In the course of his judgment Pollock B. said : "Of course, if it be capital invested, then it comes within the express provision of the Income tax Act, that no deduction is to be made on that account." but held that : business can doubt that this is not capital invested.
What it is is this.
It is capital used by the Appellants but used only in the sense that all money which is laid out by persons who are traders, whether it be in the purchase of goods be they traders alone, whether it be in the purchase of raw material be they manufacturers, or in the case of money lenders, be they pawnbrokers or money lenders, whether it be money lent in the course of their trade, it is used and it comes out of capital, but it is not an investment in the ordinary sense of the word.
" In the present case, the conditions for the grant of the allowance under section 10(2)(xi) of the Income tax Act are satisfied.
In the first place, the debt is in respect of the business which is carried on by the appellant in the relevant accounting year and accounts of the business are admittedly kept on mercantile basis.
In the second place, the debt is in respect of and incidental to the business ,of the appellant.
It has also been found that the debt had become irrecoverable in the relevant accounting year and the amount had been actually written off as irrecoverable in the books of the appellant.
For these reasons, we hold that the judgment of the Bombay High Court dated August 27, 1962 should be set aside and the question referred to the High Court must be answered in the affirmative and in favour of the appellant.
We accordingly allow this appeal with costs here and in the High Court.
V.P.S. Appeal allowed. | The appellant, who was carrying on the business of financing film producers and distributors, had advanced a sum of Rs. 1,00,000 to a firm of film distributors.
Clause 3 of the agreement between the parties provided that the appellant was not entitled to any interest but that he was to share with the distributors their profit and loss; and cl. 7 provided that in case the picture was not released within the stipulated time, the distributors would return to the appellant all the moneys advanced by him together with interest at 9% per annum.
There was delay in releasing the picture and a dispute arose between the appellant and the distributors, which was settled.
The appellant found that a sum of Rs. 80,759 was irrecoverable.
He accordingly wrote it off as a bad debt and claimed it as a revenue loss which should be deducted under section 10(2)(xi) of the Income tax Act, 1922.
The department, the Appellate Tribunal, and the High Court on reference, held against the appellant, on the basis of cl. 3 of the agreement, that the loss suffered by the appellant was a capital loss.
In appeal to this Court, HELD : Since all payments reduce capital one is apt to consider a loss as a capital loss.
But losses in the running of a business cannot be said to be of capital.
To find out whether an expenditure is on the capital account or on revenue account, one must consider the expenditure in relation to the business.
In the present case, the debt was in respect of and incidental to the business of the appellant in the relevant accounting year, and the accounts of his business were kept on mercantile basis.
If cls.
3 and 7 of the agreement are read together, the transaction would be a money lending transaction or a transaction in the nature of a financial deal in the course of the appellant 's business, resulting in a loan repayable with interest.
Therefore, the loss suffered was a revenue loss and the appellant was entitled to claim the deduction of the amount as a bad debt under section 10(2) (xi) of the Act.
[241H; 242E F] Reid 's Brewery Co. Ltd. vs Male, , applied. |
Appeal No. 1420 of 1966.
129 Appeal by special leave from the judgment and order dated October 21, 1965 of the Mysore High Court in Writ Petition No. 2173 of 1964.
section T. Desai, B. R. L. Iyenger and B. R. G. K. Achar, for the appellant.
R. B. Datar, Anil Kumar Sablok and B. P. Singh, for the respondent.
The Judgment of the Court was delivered by Shelat, J.
This appeal by special leave is against the Judg ment and Order of the High Court of Mysore quashing the memorandum dated July 4, 1963 whereby the State Government terminated the service of the respondent.
The only question arising in this appeal is one of interpretation of the Government Order No. GAD 46 SRR, dated September 22, 1961.
The respondent entered government service as an officiating computor in the Government Press on March 11, 1958 and con tinued in that post until September 1, 1958.
He was thereafter appointed from time to time in officiating capacity in different posts though in the same department until December 3, 1959 when he was appointed as a proof examiner.
He continued in that post until February 28, 1961.
According to the appellants there was break in his service on March 1, 1961 as his service was terminated on February 28, 1961 and he was once again appointed on March 2, 1961 as a second division clerk (industrial.).
He continued in that post until July 4, 1963 when the impugned order terminating his service was passed.
The first of March 1961 on which it was said there was break in his service was a holiday.
There is no dispute that the respondent was throughout work ing in officiating capacity and was a "local candidate" like several other such employees appointed by direct recruitment by Government instead of regular recruitment by the Public Service Commission of the State as required by the rules of Recruitment.
Rule 8(27A) of the Mysore, Civil Service Rules, 1958 defines a "local candidate" as meaning a temporary Government servant not appointed regularly in accordance with the Rules of Recruitment to that service.
Rule I(A) of the Mysore Government Servants ' (Seniority) Rules, 1957 provides that those rules do not apply to a person appointed as a local candidate so long as he is treated as such.
It further provides that where his appointment is treated as regularised from any date, his seniority in the service shall be determined in accordance with these rules as if he had been appointed regularly in accordance with the Rules of 130 Recruitment to the post held by him on that day.
Since the appointment of local candidates as in the case of the respondent was not made by or through the Public Service Commission as required by the Rules, the State Government with a view to regularise such appointments passed the said order dated September 22, 1961.
The material portion of the said order runs as follows 2.
(i) All appointments to Class III Direct Recruitment Posts made by the local appointing authorities, both in the old Mysore area (including Bellary District) and in the other integrating areas up to 31st December 1959 (inclusive) may be regularised subject to the condition that the candidates were within the prescribed age limits and had the requisite qualifications at the time of their initial appointments; (ii) The services of local candidates shall be regularised with effect from the date of their appointment, from which their service is continuous provided they were in service on 1st January 1960 and continue to be in service at the time their services are regularised.
(iii) The local service will count for purposes of leave, pension and increments. . but not for purposes of seniority; only the service from the date of regularisation of their appointments in the particular department will count for seniority; (iv) Breaks in service will not be condoned even if such breaks are only for short periods.
In the Writ Petition filed by the respondent against the im pugned order dated July 4, 1963 terminating his service the respondent raised two points : (1) that though he was a local candidate appointed from time to time to the aforesaid posts he was entitled to have his service regularised under the said order and (ii) that as he was entitled to be so regularised he was also entitled to the protection of Article 311(2) of the Constitution.
Consequently, his service could not be terminated in the manner it was done by the impugned order.
The contention of the State Government on the other hand was that the order of regularisation did not apply to the respondent as his service was not continuous as required by the said order and therefore there was no question of Article 311 being applicable to his case and the State Government was entitled therefore to terminate his service by the said order of July 4, 1963.
131 The High Court on an interpretation of the Order dated September 22, 1961 repelled the Government 's contentions and held that the respondent was entitled to have his service regularised with effect from the date his service was continuous prior to December 31, 1959 and that being so, the order terminating his service on the erroneous basis that he was a temporary government servant not entitled to the benefit of the aforesaid regularisation order was violative of Article 311.
This interpretation meant that the appointment and service of the respondent were not only to be regularised but as a result of such regularisation the respondent had to be treated as a permanent servant being entitled to the protection of Article 311(2).
The High Court arrived at this result on the interpretation it gave to the portion of the said Order which we have set out above.
The High Court observed that sub clause (2) of clause 2 of the said Order provided for the fixation of the date with effect from which the appointment was deemed to have been made permanent and that the second part of that sub clause laid down the conditions which if satisfied entitled the respondent for regularisation.
According to the High Court the necessary conditions for such regularisa tion were : (a) that the local candidate should be in service on January 1, 1960 and (b) that he should continue to be in service at the time his service was to be regularised.
The High Court further observed that what sub clause (2) required was "not continuity of service but that the services be continued at the time of the regularisation" and that the intention of the Government was not to lay down the condition of continuous service between December 31, 1959 and the date of the said Government order.
It then observed "When the Government order by a fiction of the law provided for regularisation of services with effect from a date anterior to 31 12 1959, the local candidates who satisfy the qualifications and conditions prescribed by sub paras (i) and (ii) are deemed to have been permanently appointed with effect from a date anterior to 31 12 1959.
Where the local candidate possesses the qualifications prescribed in sub para (i) of para 2, if his initial appointment was made before 31 12 1959, he is entitled to have his appointment regularised provided he was in service on 1st January 1960 and is continued in service at the time of the G.O., notwithstanding any break in service between 31 12 1959 and 22 9 1961.
" The High Court also held that sub clause (iv) on which reliance was placed by the Government had reference to break in service before December 31, 1959 and not during the period subsequent to that date.
Thus, according to the High Court if a local candidate 132 was initially appointed prior to December 31, 1959 and was in service on January 1, 1960 and also on September 22, 1961 he was entitled to the benefit of the regularisation order.
So long as he was in service on the two termini his service would have to be regularised irrespective of whether his service during the interval was continuous or not.
The High Court also equated regularisation with permanence of service and therefore held that once a local candidate 's service was regularised he had to be treated as a permanent servant.
Before we proceed to consider the construction placed by the High Court on the provisions of the said order we may men tion that in the High Court both the parties appear to have proceeded on an assumption that regularisation meant permanence.
Consequently it was never contended before the High Court that the effect of the application of the said order would mean only regularising the appointment and no more and that regularisation would not mean that the appointment would have to be considered to be permanent as an appointment to be permanent Would still require confirmation.
It seams that on account of this assumption on the part of both the parties the High Court equated regularisation with permanence.
We are however not called upon in this appeal to decide and we do not decide that question as Mr. Desai on behalf of the State Government assured us that the Government bad come in appeal only in its anxiety to have the order interpreted by this Court as the construction placed by the High Court on the said order, if upheld, would have considerable repurcussions on the prospects of other State employees.
He also assured us on behalf of the State Government that since the break in the service of the respondent during the material time was only of one day, viz., March 1, 1961, assuming there was such a break, the government would not do anything to adversely affect his service and would not take away the benefit which he acquired as a result of the High Court 's judgment, even if we were to disagree with the interpretation placed by the High Court on the said Order.
Coming now to the Order, sub clause (i) of clause 2 provides that all appointments to Class III posts by direct recruitment made up to December 31, 1959 should be regularised provided the candidates satisfied the conditions as to age and qualifications at the time of their initial appointment.
The controversy arises ,on the construction of sub clause (ii).
That sub clause provides that the services of such candidates shall be regularised with effect from the date of their appointment from which their services are continuous provided they were in service on January 1, 1960 and continue to be in service at the time their services are regularised.
It is clear from the express words used in this sub clause that 133 continuity of service from January 1, 1960 until the date of the order is a condition prescribed for regularisation.
In other words, a candidate claiming the benefit of this order has to satisfy that he was initially appointed prior to December 31, 1959, that he was in service on January 1, 1960 and continued in that service, till the date of the order, i.e., September 22, 1961.
This construction finds support from sub clause (iii) which provides that local service prior to regularisation would be counted for the purposes of leave, pension and increments though not for seniority as seniority was to be fixed from the length of service calculated from the date of regularisation.
It is manifest that unless the local service was continuous such service could not be taken into account for the purposes, in particular of pension and increments.
How would increments, for example, be granted unless the service prior to such increments was continuous ? The same consideration would also apply in the case of pension.
It had therefore to be provided as has been done in sub clause (iv) that a break in service would not be condoned for a period howsoever short.
Continuity of service is thus a condition for both sub clauses 2 and 3.
The High Court was therefore in error when it said that sub clause (iv) did not relate to considerations under sub clause (ii) or that it had reference only to a break in service before December 31, 1959.
The High Court was also in error when it construed sub clause (ii) to mean that the only thing it required was, that the candidate had to be appointed initially prior to December 31, 1959 and that he had to be in service on the two dates,.
viz., January 1, 1960 and September 22, 1961 and that the service during the interval need not be continuous.
If that construction were to be upheld it would result in injustice, for local candidates.
not recruited regularly and not in continuous service provided they were in service on the two relevant dates, viz., January 1, 1960 and September 22, 1961, would get seniority over candidates.
regularly appointed after December 31, 1959 and whose service Is continuous.
Such a result would manifestly be both unjust and improper and could hardly have been contemplated.
Therefore the proper interpretation would be that in order that the regularisation order may apply to a particular case the local, candidate must be initially appointed prior to December 31, 1959, he must be in service on January 1, 1960 and continue to be in service without any break till the date of the said order.
If his service is regularised, his service from the date of such regularisation would be counted for seniority as against others who were recruited properly under the Rules of Recruitment.
Under subclause (iii) however if the service is continuous from January 1, 1960 to September 22, 1961, such service is to be taken into account for purposes of leave, pension and increments but not for purposes of seniority.
The construction which we are inclined to adopt thus harmonises all the provisions of the Order and besides.
134 results in fairness to all the local candidates appointed by direct recruitment whether regularly or otherwise.
For the reasons aforesaid the construction placed by the High Court cannot be sustained.
Though the construction which we are inclined to adopt is in support of the stand taken by the State Government, in view of the assurance given by counsel on behalf of the Government that this construction should not affect the regularisation of the respondent 's service and its having been considered by the High Court as permanent, it is not necessary to interfere with the order passed by the High Court.
The appeal consequently is dismissed.
There will however be no order as to costs.
G.C. Appeal dismissed. | The respondent joined Class III service of the Mysore Government in 1958 as a local candidate.
According to the Mysore Civil Service Rules, 1958 a local candidate meant a temporary Government servant not appointed regularly in accordance with the rules of recruitment to that service.
On September 22, 1961 the Mysore Government passed art order whereby under sub cl.
(i) of cl. 2 local candidates appointed before Dec. 31, 1959, were entitled to have their appointments regularised subject to certain conditions.
According to sub cl.
(ii) of cl. 2 of the Order the services of local candidates were to be regularised with effect from the date of their appointment ', from which their service was continuous provided they were in service on 1st January 1960 and continued to be in service at the time their services were regularised.
Sub clause (iii) said that local service would count for purposes of leave, pension and increments but not for purposes of seniority, and that only the service from the date of regularisation of the appointment in the particular department would count for seniority.
Sub clause (iv) laid down that breaks in service would not be condoned even if such breaks were only for short periods.
There was a break of one day in the respondent 's service on March 1, 1961.
The Mysore Government terminated his service on July 4, 1963.
The respondent filed a writ petition before the High Court claiming that he was entitled to have his appointment regularised under the aforesaid Government Order.
The High Court held that the requirements of the Order were that a local candidate was entitled to its benefit if he joined service before Dec. 31, 1959, and was in service on two dates, namely 1st January 1960 and 22nd September 1961.
On this view the High Court allowed the respondent 's petition whereupon the State appealed to this Court.
HELD : The High Court was wrong in its construction of sub cl.
(ii) of cl. 2 of the Order.
On a harmonious construction of sub cl.
(ii) with the other subclauses of cl. 2 its proper interpretation would be that in order that the regularisation order may apply to a particular case the local candidate must be initially appointed prior to December 31, 1959, he must be in service on January 1, 1960 and continue to be in service without any break till the date of the order.
Since the service of the respondent was not continuous during this period he was not entitled to regularisation of his appointment under the Order.
(133 G] |
Appeals Nos.
2596 and 2597 of 1966.
Appeals by special leave from the Orders dated May 2, 1966 and June 22, 1966 of the Government of India, Ministry of Mines and Metals, New Delhi on application is filed by the appellant under Rule 54 of the Mineral Concession Rules, 1960.
section J. Sorabji, A. J. Rana, J. R. Gagrat and B. R. Agarwal, or the appellant (in both the appeals).
G. N. Dikshit, R. N. Sachthey for section P. Nayyar, for respondent No. 1 (in both the appeals).
P. Ram Reddy and B. Parthasarathy, for respondent No. 2 (in both the appeals).
M. C. Setalvad, B. Dutta, and O. C. Mathur, for respondent No. 3 (in both the appeals).
The Judgment of the Court was delivered by Mitter, J.
These two appeals by special leave, are Iimited to the question as to whether in dismissing a revision and confirming the order of the State of Andhra Pradesh, the Union of India was bound to make a speaking order.
The text of the order is the same in both the cases, the only difference being in 304 the situs and the area in respect of which the lease was applied for.
One of the orders runs as follows "New Delhi, the 22nd June, 1966".
I am directed to refer to your revision application dated 14 12 1964 and letter dated 28 1 1966 on the above subject and to say that after careful consideration of the grounds stated therein, the Central Government have come to the conclusion that there is no valid ground for interfering with the decision of the Government of Andhra Pradesh rejecting your application for grant of mining lease for asbestos over an area of Ac.1 13 50 in Brahmanapalii village, Cuddapah District, Andhra Pradesh.
Your application for revision is, therefore, rejected.
" The facts leading to the two appeals are as follows : In response to a notification dated January 8, 1964 published in the State Gazette by the Andhra Pradesh Government inviting applications under r. 58 of the rules framed under the (hereinafter referred to as the Rules and the Act) the appellant submitted two applications in the prescribed form viz., Form "I" for areas aggregating Ac.
113 50 in village Brahmanapalli and Ac.
13 10 in village Ippatta both in the district of Cuddapah for mining asbestos.
Respondent No. 3 also made similar applications on the same date.
According to the appellant his applications complied with all the requirements of Form "I" while those of respondent No. 3 were defective in some respects.
Besides the appellant and the respondent No. 3, there was only one other person who applied for a prospecting licence which was rejected off hand.
As between the appellant and the respondent No. 3, the Government of Andhra Pradesh preferred the latter.
The relevant portion of the order dated 19th October 1964 in respect of the village Brahmanapalli under section 10(3) of the Act was as follows : "As between the other applicants Sri Bhagat Raja and M/s. Tiffin 's Barytes, Asbestos and, Paints Ltd., the Government prefer M/s. Tiffin 's Barytes. as they are having adequate general experience and technical knowledge, and are old lessees in the district, without any arrears of mineral dues to the Government.
The mining lease application of Sri Bhagat Raja for the areas covered by the mining lease application of M/s. Tiffin 's Barytes, Asbestos and Paints Ltd. is rejected.
" 305 The text of the Order with regard to village Ippatta is practically the same.
The appellant filed application in revision in the prescribed form i.e. Form 'N ' under section 30 of the Act read with r. 54 to the Union of India on December 14, 1964.
The appellant tried to bring out in his revision applications that the financial condition of the 3rd respondent was extremely precarious as would be evidenced by documents, copies whereof were annexed to his petition.
The 3rd respondent filed a counter statement to the revision application in April 1965.
In March 1966 the appellant received the comments of the Andhra Pradesh Government on his revision applications.
The appellant filed rejoinder to the counter statements of the 3rd respondent in May 1965 and to the comments of the Andhra Pradesh Government in April 1966.
He also asked for the grant of a personal hearing before the decision of the case which was not given.
Ultimately, his applications were rejected by orders quoted hereinabove.
Various grounds of appeal were taken in the application for special leave to appeal preferred by the appellant.
An, attempt has been made therein to show that respondent No. 3 had no experience in asbestos mining, that its financial position was very unsatisfactory and that its application for mining lease was not in proper form.
A complaint was also made that in rejecting the applicant 's revision applications the Union of India was bound to give reasons for its decision as it was exercising quasi judicial powers under section 30 of the Act read with rr.
54 and 55, that principles of natural justice and fairplay requiring the divulgence of the grounds were violated and that a personal hearing should have been given to the appellant before the disposal of the revision applications.
We are not called upon in this case to go into the merits of the case but only to examine the question as to whether it was necessary for the Government of India to give reasons for its decision in view of the provisions of the Act and the Rules or aliunde because the decision was liable to be questioned in appeal to this Court.
It is necessary to take note of a few provisions ofthe Act and the relevant rules framed thereunder to ascertain the scope of a party 's right to, apply for a lease and the powers and duties of the Government in accepting or rejecting the some.
The preamble to the Act shows that its object was to provide for the regulation of mines and the development of minerals under the control of the Union of India.
Under section 4(1) no person can undertake any prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a prospecting licence or a mining lease granted under the Act and the Rules.
Under sub section
(2) of the section 306 "No prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules mad. , thereunder.
" S.5 lays down certain conditions which a person desiring to have a mining lease must fulfil.
section 8 provides for the period for which a mining lease may be granted.
Under section 10(1) an application for a mining lease has to be made to the State Government concerned in the prescribed form.
Sub section (3) of S.10 runs as follows : "On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any rules made thereunder, grant or refuse to grant the licence or lease." Under sub section
(2) of section 11 a person whose application for a licence is received earlier than those of others shall have a preferential right for the grant thereof over the others.
The proviso to this sub section enacts that where applications are received on the same day, the State Government, after taking into consideration the matters specified in sub section
(3), may grant the mining lease to such one of the applicants as it may deem fit.
Sub section
(3) specifies the matters referred to in sub section
(2) and they are as follows : (a) any special knowledge or experience in, prospecting operations or mining operations, as the case may be, possessed by the applicant; (b) the financial resources of the applicant; (c) the nature and quality of the technical staff employed or to be employed by the applicant; and (d) such other matters as may be prescribed. 'section 13(1) enables the Central Government to make rules for regulating the grant of prospecting licences and mining leases.
Under s.19 any mining lease granted, renewed or acquired in contravention of the provisions of the Act is to be void and of no effect.
Power of revision of the order of the State Government is given to the Central Government in the following terms: "The Central Government may, of its own motion or on application made within the prescribed time by the aggrieved party, revise any order made by a State Government or other authority in exercise of the powers conferred on it by or under this Act.
" Rules were made by the Central Government under s.13 of the Act known as the Mineral Concession Rules, 1960.
R.22 pres cribes that an application for the grant of a mining lease must be made to the State Government in Form "I" accompanied by a 307 fee of Rs. 200/ , a deposit of Rs. 5001 and an income tax clearance certificate.
Under r. 26 the State Government is obliged to give reasons for refusal to grant a mining lease.
Any person aggrieved by an order made by the State Government may prefer an application for revision under r. 54 in Form 'N '.
In every such application against the order of the State Government refusing to grant a mining lease, a person to whom a lease has been granted must be impleaded as a party.
R. 55 originally framed in 1960 was amended in July 1965.
Under the amended r.55 the position is as follows: "(1) On receipt of an application for revision under r. 54, copies thereof shall be sent to the State Government and to all the impleaded parties calling upon them to make such comments as they may like to make within three months of the date of issue of the communication and if no comments are received within that period, it is to be presumed that the party omitting to make such comments has none to make.
(2) On receipt of the comments from any party under Sub rule (1), copies thereof have to be, sent to the other parties calling upon them to make further comments as they may like to make within one month from the date of the issue of the communication.
(3) The revision application, the communications containing comments and counter conmments referred to in sub rules (1) and (2) shall constitute the record of the case.
(4) After considering the records referred to in sub rule (3), the Central Government may confirm, modify or set aside the order or pass such other order in relation thereto as it may deem just and proper.
" From the above, it will be amply clear that in exercising its powers of revision under r. 55 the Central Government must take into consideration not only the material which was before the State Government but comments and counter comments, if any, which the parties may make regarding the order of the State Government.
In other words, it is open to the parties to show how and where the State Government had gone wrong, or, why the order of the State Government should be confirmed.
A party whose application for a mining lease is turned down by the State Government is therefore given an opportunity of showing that the State Government had taken into consideration irrelevant matters or based its decision on grounds which were not justified.
At the time when applications for a licence are made by different parties to the State Government.
they are not L5Sup/67 7 308 given an opportunity of showing any defects or demerits in the applications of the others or why their applications should be Preferred to others.
The State Government has to make up its mind by considering the applications before it as to which party is to be preferred to the other or others.
S.11(3), as already noted, prescribes the matters which the State Government must consider before selecting one out of the numerous applicants.
But the possibility of the State Government being misled in its consideration of the matters cannot be ruled out.
It may be that a party to whom a lease is directed to be granted has in fact no special knowledge or experience requisite for the mining operations or it may be that his financial resources have not been properly disclosed.
It may also be that the nature and quality of the technical staff employed or to be employed by him is not of the requisite standard.
In an application for revision under r. 55 it will be open to an aggrieved party to contend that the matters covered by sub section
(3) of section 11 were not properly examined by the State Government, or that the State Government had not before it all the available material to make up its mind with respect thereto before grant in a licence.
In a case where complaints of this nature are made, of necessity, the Central Government has to scrutinise matters which were not canvassed before the State Government.
A question may arise in such cases as to whether the order of the Central Government in the form in which it was made in this case would be sufficient, specially in view of the fact that the correctness thereof may be tested in appeal to this Court.
It is now well settled that in exercising its powers of revision under r. 55 the Central Government discharges functions which are quasi judicial : see Shivji Nathubhai vs The Union of India & Ors.
(1) and M. P. Industries vs Union (1).
In the latter case one of us (our present Chief Justice) said (at p. 471) : "The entire scheme of the rules posits a judicial procedure and the Central Government is constituted as a tribunal to dispose of the said revision.
Indeed this Court in Shivji Nathubhai vs The Union of India (supra) rules that the Central Government exercising its power of review under r. 54 of the Mineral Concession Rules, 1949, was acting judicially as a tribunal.
The new rule, if at all, is clearer in that regard and emphasises the judicial character of the proceeding.
If it was a tribunal, this Court under article 136 of the Constitution can entertain an appeal against the order :of the Central Government made in exercise of its revisional powers under r. 55 of the Rules." (1) [1960]2 S.C.R. 775.
(2) 309 Let us now examine the question as to whether it was incum bent on the Central Government to give any reasons for its decision on review.
It was argued that the very exercise of judicial or quasi judicial powers in the case of a tribunal entailed upon it an obligation to give reasons for arriving at a decision for or against a party.
The decisions of tribunals in India are subject to the supervisory powers of the High Courts under article 227 of the Constitution and of appellate powers of this Court under article 136.
It goes without saying that both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word "rejected", or, "dismissed".
In such a case, this Court can probably only exercise its appellate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the appeal.
This will certainly be a very unsatisfactory method of dealing with the appeal.
Ordinarily, in a case like this, if the State Government gives sufficient reasons for accepting the application of one party and rejecting that of the others, as it must, and the Central Government adopts the reasoning of the State Government, this Court may proceed to examine whether the reasons given are sufficient for the purpose of upholding the decision.
But, when the reasons given in the order of the State Government are scrappy or nebulous and the Central Government makes no attempt to clarify the same, this Court, in appeal may have to examine the case de novo without anybody being the wiser for the review by the Central Government.
If the State Government gives a number of reasons some of which are good and some are not, and the Central Government merely endorses the order of the State Government without specifying those reasons which according to it are ,sufficient to uphold the order of the State Government, this Court, in appeal, may find it difficult to ascertain which are the grounds which weighed with the Central Government in upholding the order of the State Government.
In such circumstances, what is known as a "speaking order" is called for.
The order of the Central Government of June 22, 1966 is so worded as to be open to the construction that the reviewing authority was primarily concerned with finding out whether any grounds had been made out for interfering with the decision of the State Government.
In other words, the Central Government was not so much concerned to examine the grounds or the reasons for the decision of the State Government but to find out whether here was any cause for disturbing the same Prima facie the order does not show that the reviewing authority had any thought of expressing its own reasons for maintaining the decision arrived at.
If detailed reasons had been given by the 310 State Government and the Central Government had indicated clearly that it was accepting the reasons for the decision of the State Government, one would be in a position to say that the reasons, for the grant of a lease to a person other than the appellant were obvious.
But, where as here, the State Government does not find any fault or defect in the application of the unsuccessfully applicant and merely prefers another on the ground that "he had adequate general experience and technical knowledge and was an old lessee without any arrears of mineral dues" it is difficult to say what turned the scale in favour of the successful applicant excepting the fact that he was known to the State Government from before.
We do not want to express any views on this but if this be a proper test, then no new entrant in the field can have any chance of success where there is in old lessee competing with him.
The order of the Central Government does not bring out any reason for its own decision except that no ground for interference with the decision arrived at was established.
Now we propose to examine some decisions of this Court where the question as to whether the reviewing authority should give reasons for its decisions was gone into.
In Harinagar Sugar Mills vs Shyam Sundar Jhunjhunwala(1) this Court had to consider whether the Central Government exercising appellate powers under s.111 of the before its amendment in 1960 was a tribunal exercising judicial functions and as such, subject to the appellate jurisdiction of this Court under article 136 of the Constitution and whether the Central Government had acted in excess of its jurisdiction, or acted illegally otherwise in directing the company to register the transfer or transfers in favour of the respondents.
There, the articles of association of the company concerned gave the directors the right in their absolute discretion and without assigning any reason to refuse to register any transfer of shares.
The directors declined to register some shares in the name of the transferees who applied to the High Court at Bombay for orders under section 38 of the Indian Companies Act, 1913 for rectification of the share register on the ground that the board of directors had exercised their right mala fide, arbitrarily and capriciously.
The High Court rejected these petitions on the ground that controversial questions of law and fact could not be tried in summary proceedings under section 38.
The transferees requested the directors once more to register the shares.
On their refusal to do so, appeals were preferred to the Central Government under s.111(3) of the Indian which had since come into operation.
The Joint Secretary, Ministry of Finance, who heard the appeals declined to order registration of transfers (1)[1962] 2 S.C.R. 339 @ 357.
311 practically on grounds similar to those put forward by the High Court of Bombay.
Thereafter, the original holder of the shares transferred some shares to his son and some to his daughter in id '", and the transferees requested the company to register the transfers.
The directors once more refused.
Against the resolution of the directors, separate appeals were preferred by the son and daughter in law of the original holder of the shares.
The Deputy Secretary to the Government of India set aside the resolution passed by the board of directors and directed the company to register the transfers.
No reasons were however given for such order.
The company came up in appeal to this Court under article 136 of the Constitution.
According to the judgment of the majority of Judges, the exercise of authority by the Central Government was judicial as it had to adjudicate upon the rights of contesting parties when there was a lis between them.
It was observed in that case that "If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this court under Art 136 of the Constitution, we fail to see how the power of this court can be effectively exercised if reasons are not given by the Central Government in support of its order." This Court further held that there had been no proper the appeals, no reasons having been given in support orders of the Deputy Secretary who heard them and result, the orders were quashed with a direction that the be re heard and disposed of according to law.
In Sardar Govindrao vs State(1) the appellants who to be descendants of former ruling chiefs in same districts of Madhya Pradesh applied under the Central Provinces and Berar Revocation of Land Revenue Exemptions Act, 1948 for grant of money or pension as suitable maintenance for themselves.
They held estates in two districts on favourable terms as Jahgirdars Maufidars and Ubaridars and enjoyed, an exemption from paymnent of land revenue aggregating Rs. 27,828 5 0 per year.
On the passing of the Act, the exemption was lost and they claimed to be entitled to grant of money or pension under the provisions of the Act.
They applied to the Deputy Commissioner who forwarded their applications to the State Government.
These were rejected without any reasons being given therefor.
The appellants filed a petition in the High Court of Madhya Pradesh under article 226 of the Constitution for a writ of certiorari 'to quash the order of the State Government.
The High Court held that the State Government "was (1) [ ; 312 not compelled to grant either money or pension because the exercise of the power under section 5 was discretionary and the petition, therefore was incompetent." section 5(3) of the C.P. and Berar Act provided as follows : "The Provincial Government may make a grant of money or pension (i) for the maintenance or upkeep of any religious, charitable or public institution or service of a like nature, or (ii) for suitable maintenance of any family of a descendant from a former ruling chief.
" section 6 'barred the jurisdiction of civil courts.
It was observed by this Court .
"The Act lays down upon the Government a duty which obviously must be performed in a judicial manner.
The appellants did not seem to have been heard at all.
The Act bars a suit and there is all the more reason that Government must deal.
with such case in a quasi judicial manner giving an opportunity to the claimants to state their case in the light of the report of the Deputy Commissioner.
The appellants were also entitled to know the reason why their claim for the grant of money or pension was rejected by Government and how they were considered as not falling within the class of persons who it was clearly intended by the Act to be compensated in this manner. .
As the order of Government does not fulfil the elementary requirements of a quasijudicial process we do not consider it necessary to order a remit to the High Court.
" In the result this Court set aside the order of the Government and directed the disposal of the case in the light of the remarks made.
In M. P. Industries vs Union(1) the order of the Central Government rejecting the revision application under r. 55 of the Mineral Concession Rules was couched in exactly the same language as the order in appeal before us (see at p. 475 of the report) One cannot help feeling that the Ministry concerned have a special form which is to be used whenever a review application is to be rejected.
This may easily lead anyone to believe that the review is a sham and nothing but the formal observance of the power granted to the Central Government.
In that case, all the three learned Judges of this Court who heard the appeal were unanimous in dismissing it : some of the obser (1) [196] 1 S.C.R. 466. 313 vations made bear repetition.
It was there argued that if the Central Government had to give reasons when it functioned as a tribunals it would obstruct the work of the Government and lead to unnecessary delays.
As to this it said by our present Chief Justice : "The Central Government functions only through different officers and in this case it functioned through an Under Secretary.
The condition of giving reasons is only attached to an order made by the Government when it functions judicially as a tribunal in a comparatively small number of matters and not in regard to other administrative orders it passes.
Our Constitution posits a welfare State. .In the context of a welfare State, administrative tribunals have come to stay.
Indeed, they are the necessary concomitants of a welfare State.
But arbitrariness in their functioning destroys the concept of a welfare State it , self Self discipline and supervision exclude or at any rate minimise arbitrariness.
The least a tribunal can do is to disclose its mind.
The compulsion of disclosure guarantees consideration.
The condition to give reasons introduces clarity and excludes or at any rate minimises arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds.
A reasoned order is a desirable con dition of judicial disposal.
If tribunals can make orders with out giving reasons, the said power in the hands of unscrupulous or dishonest officers may turn out to be a potent weapon for abuse of power.
But, if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if it discloses extraneous or irrelevant considerations, will be subject to judicial scrutiny and correction.
A speaking order will at its best be a reasonable and at its worst be at least a plausible one.
The public should not be deprived of this only safeguard.
" It was further observed in that case that the position of ordinary courts of law was different from that of tribunals exercising judicial functions and it was said : "A Judge is trained to look at things objectively, uninfluenced by considerations of policy or expediency; but, an executive officer generally looks at things from the standpoint of policy and expediency.
The habit of 314 mind of an executive officer so formed cannot be expected to change from function to function or from act to act.
So it, is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affecting the rights of parties; and the least they should do is to give reasons for their orders.
Even in the case of appellate courts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional court agrees with the reasoned judgment of the subordinate court or there are no legally permissible grounds to interfere with it.
But the same reasoning cannot apply to an appellate tribunal, for as often as not the order of the first tribunal is laconic and does not give any reasons.
That apart, when we insist upon reasons; we do not prescribe any particular form or scale of the reasons.
The extent and the nature of the reasons depend upon case of affirmance where the original tribunal gives bunal shall give its own reasons succinctly; but in a case of affirmance where the original tribunal gives adequate reasons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons.
What is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by reference to those given by the original tribunal.
The nature and the elaboration of the reasons necessarily depend upon the facts of each case.
" It must be noted however that the above view was not shared by the two other Judges of the Bench constituting this Court.
It was said by them : "For the purpose of an appeal under article 136, orders of Courts and tribunals stand on the same footing.
An order of court dismissing a revision application often gives no reason, but this is not a sufficient ground for quashing it.
Likewise, an order of an ad minstrative tribunal, ' rejecting a revision application cannot be pronounced to be invalid on the sole ground that it does not give reasons for the rejection.
" They distinguished the case of Harinagar Sugar Mills Ltd.(1) on the ground that the Central Government had reversed the decision ' appealed without giving any reasons and the latter did not disclose any apparent grounds for reversal and added: "There is a vital difference between the order of reversal by the appellate authority in that case for no (1) [1962] 2 section
C.R. 339.
315 reason whatsoever and the order of affirmance by the revising authority in the present case.
" As has already began noted, the board of directors in that case did not give any reasons for the refusal to register and the Central Government adopting the same course reversed the decision of the directors without giving any reasons.
Clearly, the act of the Central Government there savoured of arbitrariness.
Under the articles of association of the company, the directors were not obliged to give any reasons.
Their power of refusal was unrestricted if they acted bona fide or in the interest of the company.
The reversal of their discretion clearly amounted to a finding that they had acted arbitrarily or mala fide and one was; left to guess the reasons of the Central Government for coming to this conclusion.
As has already been said, when the authority whose decision is to be reviewed gives reasons for its conclusion and the reviewing authority affirms the decision for the reasons given by the lower authority, one can assume that the reviewing authority found the reasons given by the lower authority as acceptable to it; but where the lower authority itself fails to give any reason other than that the successful applicant was an old lessee and the reviewing authority does not even refer to that ground, this Court has to grope in the dark for finding out reasons for upholding or rejecting the decision of the reviewing authority.
After all a tribunal which exercises judicial or quasi judicial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of parties of far reaching consequence to them are adjudicated upon in a summary fashion, without giving a personal hearing where proposals and counter proposals are made and examined, the least that can be expected is that the tribunal should tell the party why the decision is going against him in all cases where the law gives a further right of appeal.
On behalf of the respondents, it was contended that r. 55 which provided for a revision did not envisage the filing of fresh pleadings and fresh material but only invited comments of the parties with regard to the matter before the Central Government.
It was argued that if after going through the comments and counter comments the Central Government found no reason to arrive at a conclusion different from that of the State Government, it was not called upon to disclose any grounds for its decision in review.
Our attention was drawn in particular to r. 26 of the Mineral Concession Rules which enjoined upon the State Government to communicate in writing the reasons for any order refusing to grant or renew a mining lease.
The absence of any provision in r. 55 for giving such reasons was said to be decisive on the matter as indicative of the view of the legislature that there was no necessity for giving reasons for the order on review.
We find ourselves unable to accept this contention.
Take the case 316 where the Central Government sets aside the order of the State Government without giving any reasons as in Harinagar Sugar Mills ' case(1).
The party who loses before the Central Government cannot know why he had lost it and would be in great difficulty in pressing his appeal to the Supreme Court and this Court would have to do the best it could in circumstances which are not conducive to the proper disposal of the appeal.
Equally, in a case where the Central Government merely affirms the order of the.
State Government, it should make it clear in the order itself as to why it is affirming the same.
It is not suggested that the Central Government should write out a judgment as courts of law are wont to do.
But we find no merit in the contention that an authortiy which is called upon to determine and adjudicate upon the rights of parties subject only to a right of appeal to this Court should not be expected to give an outline of the process of reasoning by which they find themselves in agreement with the decision of the State Government.
As a matter of fact, r. 26 considerably lightens the burden of the, Central Government in this respect.
As the State Government has to give reasons, the Central Government after considering the comments and counter comments on the reasons given by the State Government should have no difficulty in making up its mind as to whether the reasoning of the State Government is acceptable and to state as briefly as possible the reasons for its own conclusion.
Our attention was drawn to a judgment of this Court in Nandrant Hunatram, Calcutta vs Union of India(2).
There, one of the points made by the appellant in the appeal to this Court was that the order of the Central Government, in review, upholding the action of the State Government cancelling the mining lease granted to the appellant was bad inasmuch as no reasons were given.
It was pointed out in the judgment in that case that the facts there were so notorious that the reasons for the action of the State Gov ernment and the confirmation of its order by the Central Government were too obvious and could not possibly be questioned by anybody.
There the partners of the appellant firm had fallen out among themselves and none of them was willing to spend money on the colliery with the result that the work came to a stand still and the colliery began to get flooded.
At this juncture, Government stepped in and made a promise to the essential workmen that their wages would be paid and this saved the colliery.
Thereafter the Chief Inspector of Mines was informed by one of the partners of the appellant firm that the other partners were preventing him from making payment for running expenses of the colliery and that he was not in a position to perform his duties as an,occupier.
He accordingly resigned his office.
Tre Manager also (1) [1962]2 S.C.R. 339.
(2) A.I.R. resigned and the Sub Divisional Officer of the district informed Government that the situation had become so alarming that some action on the part of the Government was absolutely necessary.
In spite of notice, the partners refused to take any action with the result that the Government took over the colliery and terminated the lease.
The revision application filed before the Central Government under r. 54 of the rules was turned down without giving any reasons.
Negativing the contention of the appellant that the order of the Central Government was bad in law because no reasons were given, it was said by this Court that "The documents on the record quite clearly establish that the colliery was being flooded as the essential services had stopped functioning and but for the timely intervention of the State Government the col liery would have been lost.
In these circumstances, it is quite clear that the action of the State Government was not only right but proper and this is hardly a case in which any action other than rejecting the application for revision was called for and a detailed order was really not required because after all the Central Government was merely approving of the action taken in the case by the State Government, which stood completely vindicated. .
The action of the State Government far from being arbitrary or cap ricious was perhaps the only one to take and all that the Central Government has done is to approve of it." The last portion of the passage was relied upon by the counsel for the respondents in support of his argument that as the order in review is merely in confirmation of the action of the State Government reasons need not be given.
But the above dictum cannot be considered dissociated from the setting of the circumstances in which it was made.
There it was plain as a pike staff that the State Government had no alternative but to cancel the lease : the absence of any reasons in the order on review could not possibly leave anybody in doubt as to whether reasons were.
As a matter of fact in the setting of facts, the reasons were so obvious that it was not necessary to set them out.
There is nothing in this decision which is contrary to M.P. Industries vs Union(1).
What the decision says is that the reasons for the action of the State were so obvious that it was not necessary, on the facts of the case, to repeat them in the order of the Central Government.
Our attention was also drawn to another judgment of this Court in Commissioner of Income tax vs K. V. pilliah(2).
One of the questions in that case before the High Court of Mysore (1) [1966] T. section C. R. 466.
(2) 43 1.
T R. 411. 318 under section 66(2) of the Indian Income tax Act was, whether, on the facts and in the circumstances of the case, the Income tax Appellate Tribunal was justified in sustaining both the addition ,of Rs. 41 142/ as income from business and Rs. 7,000/ as cash credits, and whether such addition did not result in double taxation.
It was held by this Court that the question whether Rs. 41,142/ was liable to be taxed fell to be determined under.
the first question.
In respect of the other amount of Rs. 7,000/the Income tax Officer had held that the explanation of the assessee was untrue and the Appellate Assistant Commissioner and the Tribunal had agreed with that view.
In this setting of facts, it ,,was said by this Court: "The Income tax Appellate Tribunal is the final factfinding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion.
But, in failing to record reasons, when the Appellate Tribunal fully agrees with the view expressed by the Appellate Assistant Commissioner and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, mnerely because it does not repeat the grounds of the Appellate Assistant Commissioner on which the decision was given against the assessee or the department.
The criticism made by the High Court that the Tribunal had "failed to perform its duty in merely affirming the conclusion of the Appellate Assistant Commissioner" is apparently unmerited.
On the merits of the claim for exclusion of the amount of Rs. 7,000/ , there is no question of law which could be said to arise out of the order of the Tribunal.
" The above observations were sought to be pressed into service 'by the counsel for the respondents 'but there, is a good deal of ,difference between that case and the one with which we have to deal.
The High Court there was merely called upon to give its ,opinion on the statement of facts set out by the Appellate Tribunal.
It was for the Income tax Officer in the first instance to accept or reject the explanation with regard to the cash credit.
It the Income tax Officer found the assessee 's explanation unacceptable, lie had to say why he did not accept it.
Unless the assessee in appeal was able to point out to the Appellate authorities some flaw in the reasoning of the Income tax Officer, it is not necessary for the appellate authorities to give their reasons independently.
The ,explanation of the assessee is either accepted or rejected; but in the case which we have before us, the State Government has to consider the merits and demerits of the applications and to give its reasons why it prefers one to the other or others.
There is a dispute between two or more contesting parties and the reasons for 319 preferring one to the other or others may be more than one.
It is.
not a question of accepting or rejecting an explanation.
In our opinion, what was said in the above Income tax case will not apply in the case of a review by the Central Government of a decision of the State Government under the Act and the Rules.
It may be of interest to note that in Rex vs Northumberland Compensation Appeal Tribunal, Ex parte Shaw(1) an application was made in the King 's Bench Division in England for an order of certiorari for the quashing of a decision reached by the Compensation Appeal Tribunal dismissing an appeal by Shaw against an award to him of compensation for loss of employment as a clerk to a Hospital Board payable under the National Health Service (Transfer of Officers and Compensation) Regulations, 1948.
There the question of the practice and procedure with regard to the issue of a writ of certiorari was gone into at some length.
The tribunal in that case had made a speaking order.
It was contended by the counsel for the tribunal that the King 's Bench Division had no power to examine the order in the case before it on certiorari oil the ground that certiorari went only to defect of jurisdiction.
This was turned down and the Divisional Court held that it had jurisdiction to quash by certiorari the decision of an inferior tribunal when the latter had embodied the reasons for its decision in its order and those reasons are bad in law.
For our purpose, we need only refer to the observations of Lord Goddard, C.J. at p. 724 of the report where he said : "I think it is beneficial in this case that we should do so, not merely having regard to the facts of this case, but because so many tribunals have now been set up, all of whom, I am certain, desire to do their duty in the best way, and are often given very difficult sets of regulations and statutes to construe.
It certainly must be for their benefit, and I have no doubt but that they wilt welcome, that this court should be able to give guidance to them if, in making their orders, they make their orders speaking orders, so that this court can then consider them if they are brought before the court on certiorari '.
" The case for giving reasons or for making a speaking order becomes much stronger when the decision can be challenged not only by the issue of a writ of certiorari but an appeal to this court.
Counsel for the respondents referred us to the comment on this case made by Sir C. K. Allen in his Law and Orders (Second Edition) at p. 259 to p. 261.
According to the learned author, the Northumberland Compensation case might be a great deterrent than encouragement to speaking orders inasmuch as "the prospect (1) [1951]1 K.B. 711.
320 of having their mental process set forth in literary form, might be ,extremely disagreeable to them" and up to the year 1956 did not seem to have assisted greatly the means of recourse against decisions of inferior jurisdictions.
Speaking for ourselves, with great respect to the learned author, we do not think that the position of the Central Government as a reviewing authority tinder the Mineral Concession Rules can be equated with an appellate tribunal of the type whose decision was before the King 's Bench Division in England.
If the State Government is enjoined by law to give its reasons, there is no reason why it should be difficult for the appellate authority to do so.
The necessity and the desirability of tribunals making speaking orders has been adverted upon by different High Courts in India.
Thus in Vedachala Mudaliar vs State of Madras(3) where the State Government of Madras set ,aside the order of the Central Road Traffic Board without giving ;any reasons, it was observed that "When the policy of the Legislature is to confer powers on administrative tribunals with a duty to discharge their functions judicially I do not see any reason why they should be exempted from all those safeguards inherent in its exercise of that jurisdiction.
From the standpoint of fair name of the tribunals and also in the interests of the public, they should be, expected to give reasons when they set aside an order of an inferior tribunal. .
Further, if reasons for an order are given, there will be less scope for arbitrary or partial exercise of powers and the order 'ex facie ' will indicate whether extraneous circumstances were taken into consideration by the tribunal in passing the order." Refrence may also be made to Ramayya vs State of Andhra (2 and Annamalai vs State of Madras(3).
To the same effect is the judgment of the Kerala High Court in Joseph vs Superintendent of Post Offices, Kottayam(1).
We have already commented that the order of the Central Gov ernment in this case is couched in the same language as was used in the case before this court in M.P. Industries vs Union(5) in August 1965.
The old rule 55 was replaced by a new rule which ,came into force on 19th July 1965.
Whereas the old rule directed the Central Government to consider comments on the petition of review by the State Government or other authority only, the new rule is aimed at calling upon all the parties including the State Government to make their comments in the matter and the parties are given the right to make further comments on those made by (1) A.I.R. 1952 Madras 276.
(3) A.I.R. 1957 Andhra Pradesh 739.
(2) I.L.R. 1956 Andhra Kerala 245.
(5) ; 321 the other or others.
In effect, the parties are given a right to bring forth material which was not before the State Government.
It is easy to see that an unsuccessful party may challenge the grant of a lease in favour of another by pointing out defects or demerits which did not come to the knowledge of the State Government.
The order in this case does not even purport to show that the comments and counter comments, which were before the Central Government in this case, had been considered.
It would certainly have been better if the order of 22nd June 1966 had shown that the Central Government had taken into consideration all the fresh material adduced before it and for the reasons formulated they thought that the order of the State Government should not be disturbed.
In the result, the appeals are allowed and the orders of the Central Government passed on 22nd June, 1966 are set aside.
The Central Government is directed to decide the review applications afresh in the light of the observations made.
The appellant will get his costs throughout from the 3rd respondent.
G.C. Appeals allowed. | The appellant was one of several applicants for a mining lease in Andhra Pradesh.
The State Government however granted it to 'respondent No. 3.
The appellant then filed an application in revision, under section 30 of the Mines & Minerals (Regulation and Development) Act, 1957, read with r. 54, to the Union of India.
Respondent No. 3 filed a counter statement and the State Government filed its comments.
The appellant filed a rejoinder.
The Union Government without hearing the appellant rejected his revision application.
An appeal was filed before this Court.
The question that fell for consideration was whether it was necessary for the Government of India to give reasons for its decision in view of the provisions of the Act and the Rules or aliunde because the decision was liable to be questioned in appeal to this Court.
HELD : (i) In exercising its powers of revision under r. 55 the Central Government discharges functions which are quasi judicial.
The decisions of tribunals in India are subject to the supervisory powers of the High Court under article 227 of the Constitution and of appellate powers of this court under article 136.
Both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word 'rejected ' or 'dismissed '.
In such a case this Court can probably only exercise its appellate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the case.
This would certainly be a very unsatisfactory method of dealing with the appeal.
[308E F; 309B C] If the State Government gives sufficient reasons for accepting the application of one party and rejecting that of others, as it must, and the Central Government adopts the reasoning of the State Government, this Court may proceed to examine whether the reasons given are sufficient for the purpose of upholding the decision.
But when the reasons given in the order of the State Government are scrappy or nebulous and the Central Government makes no attempt to clarify the same, this Court, in appeal may have to examine the case de novo, without anybody being the wiser for the review by the Central Government.
The same difficulty would arise where the State Government gives a number of reasons some of which are good and some are not and the Central Government gives its decision without specifying those reasons which according to it are sufficient to uphold the order of the State Government.
That is why in such circumstances, what is known as a 'speaking order ' is called for.
[309C F] 3 03 A 'speaking order ' is all the more necessary in the case of a decision under r. 55 because there is provision for new material being placed before the Central Government which was not there before the State Government, and further, because the decision, affecting important rights of parties, is given in a summary manner without a hearing being allowed to the parties.
A party is entitled to know why the decision has gone against him.
[320G 321B] The absence in r. 55 of any provision for giving such reasons is not decisive of the matter in view of the above considerations.
[315H] Shivji Nathubhai vs The Union of India, ; , M.P. Industries vs Union, ; , Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunihunwala, ; and Sardar Govindraov.
State, [1965] 1 S.C.R. 678, followed.
Nandram Hunatram, Calcutta vs Union of India, A.I.R. 1966 S.C.1922 and Commissioner of Income tax vs K. V. Pilliah, , distinguished.
Rex vs Northumberland Compensation Appeal Tribunal Ex parte Shaw, , Vedachala Mudaliar vs State of Madras, A.I.R. 1952 Madras 276, Rantayya vs State of Andhra, I.L.R. 1956 Andhra 712, Annamalai vs State of Madras, A.I.R. 1957 Andhra Pradesh 738 and Joseph vs Superintendent of Post Offices, Kottayam, I.L.R. 1961 11 Kerala 245, referred to. |
Appeal No. 604 of 1966.
Appeal by special leave from the judgment and order dated August 5, 1964 of the Madras High Court in Tax Case No. 131 of 1963 (Revision No. 87).
G. Ramanujam and A. V. Rangam, for the appellant.
K. Srinivasan and R. Gopalakrishnan, for the respondent.
The Judgment of the Court was delivered by Shah, J.
M/s. R. Nand Lal & Company hereinafter called 'the assessee are dealers in wool at Vaniyambadi in North Arcot District in ' the State of Madras.
In proceedings for assessment of sales tax for the year 1959 60 the assessees were assessed to pay tax at the rate, of seven per cent.
on a turnover of Rs. 2,08,343 05 from sales effected by them to certain registered dealers in the State of Punjab.
The assessing authority declined to assess the turnover at one per cent.
as prescribed by section 8(1) of the , because in his view the assessees had submitted declarations in Form 'C ' covering two or more transactions contrary to the first proviso to r. 10(1) of the Central Sales Tax (Madras) Rules, 1957.
The Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal, Madras confirmed the order of the assessing authority.
The High Court of Madras, in exercise of its revisional jurisdiction, set aside the order of the Sales Tax Appellate Tribunal, and declared that the ass s were liable to pay tax on the turnover in dispute at the lower rate.
The State of Madras has appealed to this Court with special leave.
Section 8 of the (as amended by Act '31 of 1958) insofar as it is material provided "(1) Every dealer, who in the course of inter State trade or commerce (a) (b) sells to a registered dealer other than the Government goods of the description referred to in sub section (3); shall be liable to pay tax under this Act, which shall be one per cent.
of his turnover.
(2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods 647 in the course of inter State trade or commerce not falling within sub section (1) (a). . . (b) in the case of goods other than declared goods, shall be calculated at the rate of seven per cent.
or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher; (2A) (3) (4) The povisions of sub section 1) shall not apply to any sale in the course of inter State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner (a) a declaration duly filed and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or (b). . . (5) It is common ground that the turnover was in respect of goods of the class specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or for use by him in the process of manufacture of goods for sale.
A registered dealer selling goods in the course of inter State trade or commerce of the description referred to in sub section
(3) is viable under section 8 ( 1 ) of the , to pay tax only if the rate of one per cent.
on his turnover.
But to qualify himself for that rate of tax he has to furnish to the prescribed authority a declaration duly filled and signed by the registered dealer to whom the goods are sold.
Such a declaration must contain the Prescribed particulars in the prescribed form obtained from the Prescribed authority.
If the selling dealer fails to furnish the declaration in the prescribed form, he is liable to pay tax at the higher rate mentioned in sub section
(2) (b) of section 8.
The respondents did furnish declarations in Form 'C ' pres cribed under the Rules framed ' by the Central Government in exercise of the, powers vested by section 1 3 (1) (d) of the .
But each such declaration covered more transactions of sale than one and the aggregate value of the transactions recorded in each declaration exceeded Rs. 5,0001 The sales tax authorities and the Tribunal were of the view that these declarations contravened the express direction of the rule made by 648 the Madras State in exercise of the powers under section 13 (4) (e) of the .
The High Court held that r. 10(1) of the Central Sales Tax (Madras) Rules, 1957, applied only to a transaction of purchase by a dealer in the State of Madras, and not to the purchasing dealer in the State of Punjab; that the Madras State was incompetent to frame rules governing the conduct of the purchasing dealers in the Punjab that since the corresponding rules framed by the State of Punjab under section 13 (4) (e) of the did not include a provision requiring separate form to be used for each sale transaction, the purchasing dealers were not obliged to comply with r. 10(1) of the Madras Rules, and that since the Madras selling dealers could not compel the purchasing dealers to comply with the rules relating to furnishing of separate declaration forms ordained by the Madras Rules, the declarations were not defective.
In any event, the High Court held, r. 10(1) of the Madras Rules was directory and not mandatory.
The assumption made by the High Court that no rule was framed by the State of Punjab under section 13 (4) (e) of the requiring the purchasing dealers in the State of Punjab to issue a separate declaration form in respect of each individual transaction is erroneous.
It is conceded before us that the Punjab Government had in purported, exercise of the powers under sub sections
(3) & (4) of section 13 of the Central Sales Tax, 1956, made r. 7(2 A) with effect from February 17, 1958 that: "No single declaration in Form 'C ' prescribed under the Central.
Sales Tax (Registration and Turnover) Rules ' 1957, shall cover more than one transaction of sale except when the total amount of sales does not exceed five thousand rupees." But, for reasons which we will presently set out, the judgment of the High Court must still be, affirmed.
Sub section (4) of section 8 of the provides that in order to, qualify himself for the lower rate of tax it, respect of sales in the course of inter State trade or commerce, the dealer selling goods has to furnish to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold.
The expressions "prescribed authority" and "prescribed manner" mean the authority and manner prescribed by rules under the Act.
Section 13(1) of the , authorises the Central Government to make rules, providing, inter alia, the form in which and the particulars to be contained in any declaration of certificate to be given under the Act.
By sub section
(3) of section 13 the State Government is authorised to make rules not inconsistent with the provisions of the Act and the rules made under sub section
(1) to 64 9 carry out the purposes of the Act, and by sub s (4) of section 13 the State Government is, in particular and without prejudice to the powers conferred by sub section
(3), authorised to make rules for all or any of the purposes set out therein including "the authority from whom, the Conditions subject to which and the fees subject to payment of which any form of declaration prescribed under sub section
(4) of section 8 may be obtained, the manner in which the form shall be kept in custody and records relating thereto maintained, the manner in which any such form may be used and any such declaration may be furnished." In exercise of the power conferred by section 131 (d) the Central Government has prescribed the form of declaration to be furnished by the purchasing dealer under section 8 (4).
That is Form 'C '.
The form is in three sections the "counterfoil", the "duplicate" and the "original".
The "original" contains at the foot of the Form the following Note: "(To be furnished to the prescribed authority in accordance with the rules framed under section 13(4) (e) by the appropriate State Government.)" The Madras State Government presuming to act in exercise of authority under section 13(3) and section 13(4)(e) framed the Central Sales Tax (Madras) Rules, 1957, r. 10(1) of which reads as follows ': "A registered dealer, who wishes to purchase goods from another such dealer on payment of tax at the rate applicable under the Act to sales of goods by one registered dealer to another, for the purpose specified in the purchasing dealer 's certificate of registration, shall obtain from the assessing authority in the City of Madras and the registering authority at other places a blank declaration form prescribed under rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 for furnishing it to the selling dealer.
Before furnishing the declaration to the selling dealer, the purchasing dealer,or any responsible person authorized by him in this behalf shall fill in all the required particulars in the form and shall also affix his usual signature in the space provided in the form for this purpose.
Thereafter the counterfoil of the form shall be retained by the purchasing dealer and the other two portions marked "original" and "duplicate" shall be made over by him to the selling dealer Provided that no single declaration shall cover more than one transaction of sales except 650 (a) in cases where the total amount covered by one declaration is equal to or less than Rs. 5,000 or such other amount as the State Government may, by a general order, notify in the Fort.
St. George Gazette, and (b) Ex facie, this rule imposes no obligation upon a dealer in the State of Madras wishing to sell goods : it applies to a dealer wishing to purchase goods from another dealer.
The argument that cl.
(1) of r. 10 is intended to apply to a registered dealer in the State of Punjab is negatived by the scheme of the and the Rules framed thereunder.
By section 7 of the , every dealer liable to pay tax under the Act has to make an application for registration under the Act to such authority in the appropriate State as the Central Government may by general order specify.
The authority to be specified is designated in the Central Sales Tax (Registration and Turn over) Rules, 1957, framed by the Central Government under section 13(1), the "notified authority" : vide r. 2(c).
Rule 3 provides that an application for registration under section 7 shall be made by a dealer to the notified authority in Form 'A '.
In exercise of the powers conferred by sub section
(1) of section 7 of the , the Central Government issued a notification No. S.R.O. 643 dated February 22, 1957, specifying the persons mentioned in Col.
(3) of the Schedule thereto as the authorities to whom the dealers of the description in Col.
(2) shall make the application for registration.
Item 1 of the Schedule requires a dealer having a single place of business in a State to make an application to the authority competent to register him under the general sales tax law of the State if he were liable to, be so registered : and item 2 provides that the dealer having more than one place of business in a State shall make an application to the authority competent to register him in respect of the principal place of business under the general sales tax law of the State if he were liable to be so registered.
A registered dealer contemplated by r. 10 is therefore registered in the State where he has his place of business.
The expression "assessing authority" is defined in the Central Sales Tax (Madras) Rules, 1957, as meaning any person authorized by the State Government to make any assessment under the Madras General Sales Tax Act, 1959 (Madras Act 1 of 1959).
The dealer has again to obtain the form of declaration from the assessing.authority in the State of Madras.
These are clear indications that the rules framed by the Madras Government were intended to apply to dealers within the State of Madras.
The High Court was, in our judgment, right in holding that under the scheme of the and the Rules framed under that Act by the State of Madras, the injunc 651 tion against the purchasing dealers in r. 10(1) did not apply to, dealers in the State of Punjab.
It is unnecessary on that view to, express any opinion on the question whether the State Government could, in exercise of the powers under section 13 (4), impose upon dealers not within the State, obligations to comply with conditions relating to the contents of the 'C ' Form declarations.
Since, r. 10 ( 1 ) requiring that a separate declaration form in respect of each individual transaction shall be furnished was intended only to apply to dealers in the State of Madras, and not to dealers outside the State, proviso to r. 10(1) which directs that no single declaration shall cover more than one transaction of sale except in certain cases has no application to a purchasing dealer outside the State of Madras.
Rule 10(2), provides : "A registered dealer who claims to have made a sale to another registered dealer shall, in respect of such claim attach to his return in Form the portion marked "original" of the declaration received by him from the purchasing dealer.
The assessing authority may, in its discretion, also direct the selling dealer to produce for inspection the portion of the declaration marked "duplicate".
" But this rule does not direct that a declaration covering more than one transaction of sale shall not be given.
The rules framed by the Madras Government do not otherwise impose any binding obligation upon the selling dealer in the State of Madras to obtain a separate declaration form in respect of each sale transaction, nor do the rules visit him with a penalty on failure to comply with the requirement.
We are constrained to observe that the rule making authori ties have failed to appreciate the scheme of section 13 of the .
We are of the opinion that it was not within the competence of the State authorities under section 13(3) & (4) of the to provide that a single declaration covering more than one transaction shall not be made.
Authority to prescribe such an injunction cannot have its source in section 13(3) or section 13 (4) (e) : it can only be in the authority conferred by cl.
(d) of section 13(1) by the Central Government.
The Central Government has, in exercise of the power under section 1 3 (1) (d), prescribed the form of declaration and the particulars to be contained in them declaration.
A direction that there shall be a separate declaration in respect of each individual transaction may appropriately be made in exercise of the power conferred under section 13 (1) (d).
The State Government is undoubtedly empowered to make rules under sub sections
(3) and (4) of section 13 but the rules made by them 652 State Government must not be inconsistent with the provisions of ,the Act and the rules made under sub section
(1) of section 13 to carry out the purposes of the Act.
If the authority to make a rule prescribing that the declaration shall not contain more than one transaction can be made only under section 13 (1) (d), the State Government cannot exercise that authority.
The situation which has arisen in this case could have been avoided, if instead of each State making its rules requiring that no single declaration shall ,cover more than one transaction, the Central Government in exercise of the power under section 13 (1) (d) of the Act had made the rules.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed. | The assessee firm was a 'dealer ' in Madras State.
For the year 1959 60 the firm was taxed at 7% on certain sales effected to registered dealers in the Punjab on the ground that the declarations taken from dealers in Punjab in Form 'C ' were not in accordance with r. 10(1) of the Central Sales Tax (Madras) Rules, 1957.
The latter rule required ,that there must be a separate declaration in respect of each transaction whereas the declarations in the present case were in respect of several transactions each.
The appellant firm claimed that on the turnover in question it should have been assessed at one Per cent only, as laid down in section 8(1) of the Central Sales Tax Act, 1056.
The claim was turned down by the Sales tax Authorities and the Tribunal, but the High Court held that r. 10(1) of the Central Sales Tax (Madras) Rules, 1957 applied only to transactions of purchase by a dealer in the State of Madras and not to the purchasing dealer in the State of Punjab, that the Madras State was incompetent to frame rules governing the conduct of the chasing dealers in the Punjab, and that in any event r. 10(1) was tory and not mandatory.
The State appealed.
HELD: (i) Ex facie r. 10(1) imposes no obligation upon a dealer in the State of Madras wishing to sell goods : It applies to a clear wishing to purchase goods from another dealer.
The High Court was further right in holding that under the scheme of the Central Sales Tax Act and the Rules framed under that Act by the State of Madras the injunction against the purchasing dealers in r. 10(1) did not apply to dealers in the State of Punjab.
[650B 651A] Accordingly the proviso to r. 10(1) which,directs that no single declaration shall cover more than one transaction of sale except in certain cases has no application to a. purchasing dealer outside the State of Madras.
Nor does r. 10(2).
impose any binding obligation upon the selling dealer in Madras to obtain a separate declaration form in respect of each sale transaction.
[651C F] The appellants were therefore to be taxed at the rate of one per cent and not seven per cent on the turnover in question.
(ii) A rule prescribing that a declaration by a purchasing dealer shall not contain more than one transaction can only be made by the Central Government under section 13(1)(d) and the State Governments do not have 646 power under section 13(3) and section 13(4)(e) to make any such rule.
The situation which had arisen in this case could have been avoided if instead of each State making its rules requiring that no single declaration shall cover more than one transaction, the Central Government in exercise of the power under section 13(1)(d) of the Act had made the rule.
[651G H; 652A B] |
Appeal No. 51 of 1964.
Appeal by special leave from the judgment and decree dated January 3, 1962 of the Punjab High Court in Regular Second Appeal No. 1958 of 1959.
Bishan Narain and Sadhu Singh, for the appellant.
J. P. Goyal and Raghunath Singh, for respondents Nos. 1 (a) to 1 (d).
The Judgment of the Court was delivered by Bhargava, J.
This appeal arises out of a suit brought for possession of some land which was admittedly owned at one time by one Labhu.
Labhu died in the year 1917 and, on his death his widow, Smt.
Harnam Kaur, who filed the suit as plaintiff, came into possession of the land.
She continued in possession of the land until the year 1954 when, on an application made by the collaterals of Labhu, the Naib Tehsildar, by his order dated 26th June, 1954, effected mutation in favour of these collaterals.
These collaterals were defendants 1 to 4, Mangal Singh, Amer Singh, Santa Singh and Ishar Singh.
These collaterals, on the basis of the order of the Naib Tehsildar, dispossessed Smt.
Harnam Kaur.
Harnam Kaur 's appeal against the order of the Naib Tehsildar was dismissed by the Collector.
The claim of these collaterals was that Smt.
Harnam Kaur had entered into karewa marriage with one of these collaterals, Ishar Singh.
defendant No. 4 and, consequently, she had lost her right to hold the land of her first husband Labhu.
Harnam Kaur denied that she had entered into any karewa marriage with Ishar Singh and, on the basis of this denial, instituted the suit claiming possession of that land.
She pleaded that the four defendants had no right to this land and had wrongfully dispossessed her, so that they were mere trespassers.
This suit was instituted on 1st March, 1956.
After the institution of the suit, the (No. 30 of 1956) hereinafter referred to as "the Act" came into force on 17th June, 1956.
The suit was, at that time, pending and it continued to remain pending until the year 1958 when Smt.
Harnam Kaur died.
Thereupon, Smt.
Rattno applied to be substituted as plaintiff in place of Smt.
Harnam Kaur as her legal representative.
This application was allowed,, though 456 it was opposed by defendants 1 to 3.
In the trial of the suit defendants 1 to 3 took the plea that Smt.
Harnam Kaur, the original plaintiff, had lost her right to the land because of her karewa marriage with Ishar Singh, defendant No. 4.
Defendant No. 4, however, admitted the claim of Smt.
Hamarn Kaur in his written statement, denied that he had dispossessed her and also denied the allegation of her karewa marriage with him.
In these circumstances, two main questions came up for decision by the trial court.
The first question was whether Smt.
Hamam Kaur had entered into a karewa marriage with Ishar Singh, defendant No. 4, so as to lose her right to the disputed land as widow of the previous mal e owner, Labhu ? The second question that arose was whether Smt.
Rattno, who was substituted as the legal representative of Smt.
Hamam Kaur, was entitled to succeed to the property of Smt.
Hamam Kaur ? This second question depended on whether Smt.
Harnam Kaur had, or had not, become full owner of the land under section 14 of the Act.
The trial court held that Smt.
Hamam Kaur had contracted karewa marriage with Ishar Singh, defendant No. 4, and had lost her rights.
The further finding of the trial court was that Smt.
Hamam Kaur had been dispossessed before the Act came into force and, consequently, section 14 of the Act did not apply, with the result that Smt.
Rattno could not claim succession to Smt.
Hamam Kaur under that provision of law.
On these findings, the trial court dismissed the suit.
On appeal, the Additional District Judge, Patiala, recorded the finding that Smt.
Hamam Kaur had not entered into karewa marriage with Ishar Singh, defendant No. 4, and, further, that section 14 of the Act was applicable to the present case, as the land in suit was possessed by Smt.
Harnam Kaur so as to make her full owner of this land under that provision of law.
On these findings, the first appellate Court decreed the suit against defendants 1 to 3 with costs in both courts, after making a comment that Ishar Singh , defendant No. 4, was a profoma defendant.
Defendants 1 to 3, thereupon, came up in second appeal to the High Court of Punjab and impleaded as respondents Smt.
Rattno as well as Ishar Singh.
The High Court dismissed the appeal and, thereupon, defendants 1 to 3 have come up to this Court in appeal under special leave granted to them.
In this appeal also, defendants 1 to 3 impleaded both Smt.
Rattno and Ishar Singh as respondents.
During the pendency of this appeal, one of the defendants appellants died and his legal representatives were brought on the record as appellants.
Rattno also died and her legal representatives were impleaded as respondents.
Further, Ishar Singh,.
defendant No. 4, who was a respondent in this appeal, also died.
The application to bring his legal representatives on record was dismissed by the order of this Court dated 14th September, 1965 457 in Civil Miscellaneous Petition No. 1589 of 1965.
In view of this order, a preliminary objection was raised at the time of hearing of this appeal by learned counsel for the respondents, who had been impleaded as legal representatives of Smt.
Rattno, that the appeal had abated on account of the failure of the appellants to implead the legal representatives of Ishar Singh respondent.
It, however, appears that, on the pleadings of parties and the nature of the dispute that came to be settled by the lower courts, it cannot be held that this appeal must abate as a whole, or must fail because of its abatement against Ishar Singh on his death.
We have already mentioned that, though the plaintiff, Smt.
Harnam Kaur, had come forward with the allegation that she had been dispossessed by all the four defendants 1 to 4, Ishar Singh, defendant No. 4, in his written statement, repudiated this claim.
He put forward the plea that he had not dispossessed the plaintiff and, further, supported the claim of the plaintiff by pleading that there had been no karewa marriage between them. 'The suit was dismissed by the trial court.
It was decreed by the first appellate Court only against defendants 1 to 3, treating Ishar Singh as a profoma defendant.
In these circumstances, it is obvious that, when the case came up before the High Court, the dispute was confined between Smt.
Rattno, legal representative of the original plaintiff on the one side, and defendants 1 to 3 on the other.
Defendants 1 to 3 sought vacation of the decree for possession which had been granted against them in favour of Smt.
Rattno.
lshar Singh, against whom the suit had not been decreed at all, thus became an unnecessary party.
In these circumstances even if Ishar Singh had not been impleaded as respondent in the High Court, the relief claimed by defendants 1 to 3 in that Court against Smt.
Rattno could have been granted, without bringing into effect any contradictory decrees.
In the appeal in this Court also, in these circumstances, Ishar Singh was an unnecessary party and, consequently, the failure to implead his legal representatives as respondents in the appeal after his death does not affect the right of defendants 1 to 3 to claim the relief for which they have come up to this Court in appeal.
The preliminary objection, therefore, fails and is rejected.
On merits, we are of the opinion that the decision given by the High Court against the defendant appellants must be upheld.
The first appellate Court, which was the final Court for deciding question of fact, clearly recorded a finding that the karewa marriage alleged to have been entered into by the plaintiff, Smt.
Harnam Kaur, with Ishar Singh, defendant No. 4, was not proved.
That finding of fact was binding on the High Court and was rightly accepted by it.
It is no longer open to the appellants to challenge that finding of fact in this Court.
On this finding, it has to be held that the rights to the land, to which Smt.
Hamam Kaur had succeeded as widow of Labhu, were not lost by her 458 until her death, and that her dispossession by defendants 1 to 3 in the year 1954 was illegal.
They had no right to this land in ' preference to Smt.
Hamam Kaur.
It was, however, urged on behalf of the appellants that, when Smt.
Hamam Kaur died, she was not in actual possession of this land.
She had been dispossessed in the year 1954 and, at the time of her death in 1958, this suit instituted by her for possession of that land was still pending.
In the suit, her own pleading was there that the land was in actual possession of defendants 1 to 3 as trespassers, and, in such circumstances, it should be held that the land was not possessed by Smt.
Hamam Kaur at any time after the Act came into force, so that section 14 of the Act never became, applicable and she never became full owner of that land.
It may be mentioned that there was no dispute in the High Court, nor was it disputed before us that, if it be held that section 14 of the Act had become applicable and Smt.
Hamam Kaur became full owner of this land, her rights would pass on her death to Smt.
Rattno and, subsequently, on the latter 's death, to the present respondents in this appeal.
The only question for decision in this appeal, therefore, is whether it can be held that this property was possessed by Smt.
Harnam Kaur as envisaged by section 14 of the Act, so that she became full owner of this land.
Section 14(1) of the Act is as follows "14.
(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.
Explanation.
In this sub section, "property" includes both movable and immovable; "property, acquired" includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the commencement of this Act.
" The dispute in the case has arisen, because this section confers the right of full ownership on a Hindu female only in respect of property possessed by her, whether acquired before or after the commencement of the Act; and, in the present case, admittedly, the plaintiff had been dispossessed in the year 1954 and was not able to recover possession from the defendants apppellants until her death in the year 1958.
It was urged on behalf of the appellants that, in order to attract the provisions of section 14 (1) of the Act, it must be shown that the female Hindu was either in actual 459 physical possession, or constructive possession of the disputed property.
On the other side, it was urged that, even if a female Hindu be, in fact, out of actual possession, the property must be held to be possessed by her, if her ownership rights in that property still exist and, in exercise of those ownership rights, she is capable of obtaining actual possession of it.
It appears to us that, on the language used in section 14(1) of the Act, the latter interpretation must be accepted.
It is significant that the Legislature begins section 14(1) with the words "any property possessed by a female Hindu" and not "any property in possession of a female Hindu".
If the expression used had been "in possession of" instead of "possessed by", the proper interpretation would probably have been to hold that, in order to apply this provision, the property must be such as is either in actual possession of the female Hindu or in her constructive possession.
The constructive possession may be through a lessee.
mortgagee, licensee, etc.
The use of the expression "possessed by" instead of the expression "in possession of ', in our opinion, was intended to enlarge the meaning of this expression.
It is commonly known in English language that a property is said to be possessed by a person, if he is its owner, even though he may, for the time being, be out of actual possession or even constructive possession.
The expression "possessed by" is quite frequently used in testamentary documents, where the method of expressing the property, which is to pass to the legate, often adopted is to say that "all property I die possessed of shall pass to. . .
In such documents, wills, etc., where this language is used, it is clear that whatever rights the testator had in the property would pass to the legate, even though, at the time when the will is executed or when the will becomes effective, the testator might not be in actual, physical or constructive possession of it.
The legate will, in such a case, succeed to the right to recover possession of that property in the same manner in which the testator could have done.
Stroud in his Judicial Dictionary of Words and Phrases, Vol. 3, at p. 2238, has brought out this aspect when defining the scope of the words "possess" and "Possessed".
When dealing with the meaning of the word "possession", Stroud defines " possession" as being in two ways, either actual possession or possession in law.
He goes on to say that "actual possession is when a man enters in deed into lands or tenements to him descended, or otherwise.
Possession in law is when lands or tenements are descended to a man, and he has not as yet really, actually, and in deed, entered into them.
" In Wharton 's Law Lexicon, 14th Edn., at p. 777, the word "possession" is defined as being equivalent to 'the state of owning or having a thing in one 's own hands or power." Thus, three different meanings are given; one is the state of owning, the second is having a thing in one 's own bands, and the third is having a thing in one 's own 460 power.
In case where property is in actual physical possession, obviously it would be in one 's own hands.
If it is in constructive possession, it would be in one 's own power.
Then, there is the third case where there may not be actual, physical or constructive possession and, yet, the person still possesses the right to recover actual physical possession or constructive possession; that would be a case covered by the expression "the state of owning".
In fact, elaborating further the meaning of the word "possession ', Wharton goes on to say that "it is either actual, where a person enters into lands or tenements descended or conveyed to him; apparent, which is a species of presumptive title where land descended to the heir of an abator, intruder, or disseisor, who died seised; in law, when lands, etc., have descended to a man, and he has not actuary entered into them, or naked, that is, more possession, without colour of right.
" It appears to us that the expression used in section 14(1) of the Act was intended to cover cases of possession in law also, where lands may have descended to a female Hindu and she has not actually entered into them.
It would of course, cover the other cases of actual or constructive possession.
On the language of section 14(1), therefore, we hold that this prorovision will become applicable to any property which is owned by a female Hindu, even though she is not in actual, physical or constructive possession of that property.
Section 14(1) came up for interpretation in various cases before a number of High Courts, and was considered by this Court also in several cases.
In none of those cases, however, did the question directly arise as to whether section 14(1) will be applicable, if the female Hindu is out of actual, physical or constructive possession and the property happens to have been wrongfully taken into possession by a trespasser.
Most of those cases were cases where the female Hindu had either alienated her rights by a, deed of transfer or had made a gift, and it was only incidentally; that, in some of those cases, comments were made on the question whether section 14(1) of the Act will be attracted or not in cases the female Hindu bad been dispossessed by a trespasser.
So far as this Court is concerned, the earliest case is that of Gummalpura Taggina Matada Kotturuswami vs Setra Veeravva and others(1).
Dealing with the scope of section 14(1) of the Act in that case, this Court cited from a decision of Viswanatha Sastri, J. in Gaddam Venkavamma vs Gaddam Veerayya (2) , and noticed the fact that in that case it was held that the word "possessed" is used in section 14 in a broad sense and, in the context, possession means the state of owning or having in one 's bands or power.
It was also noticed that the learned Judges of the Andhra Pradesh High Court in that case had expressed the view that even if a trespasser were in possession of the land belonging to a female (1) [1959] Supp. 1 S.C.R. 968.
(2) A. I.R. 461 owner, it might conceivably be regarded as being in possession of the female owner, provided the trespasser had not perfected his, title.
Since in that case this Court was not concerned with a situation where a trespasser had actually dispossessed the female owner, the Court went on to hold: "We do not think that it is necessary in the present case to go to the extent to which the learned Judges went.
It is sufficient to say that "possessed" in section 14 is used in a broad sense and, in the context, means the state of owning or having in one 's hand or power.
" Thus, in that case decided by this Court, the broad meaning of the word "possessed ' was accepted as even including cases where the state of owning the property exists.
Learned counsel for the appellants, when bringing to our notice the views expressed by this Court in that case, also drew our attention to another part of the judgment, where this Court remarked: "Reference to property acquired before the commencement of the Act certainly makes the provisions of the section retrospective, but even in such a case, the property must be possessed by a, female Hindu at the time the Act came into force in order to make the provisions of the section applicable.
There is no question in the present case that Veerawa acquired the property of her deceased husband before the commencement of the Act.
In order that the provisions of section 14 may apply to the present case, it will have to be further established that the property was possessed by her at the time the Act came into force.
" Learned counsel, from these words, tried to draw an inference that this Court had laid down that section 14(1) will only apply to cases where the property was possessed by the Hindu female at the commencement of the Act.
We do not think that any such interpretation can be placed on the words used by this Court.
Section 14(1) covers any property possessed by a female Hindu, whether acquired before or after the commencement of the Act.
On the face of it, property acquired after the commencement of the Act by a female Hindu could not possibly be possessed by her at the commencement of the Act.
This Court, when it made the comments relied upon by learned counsel, was, in fact, concerned with a case of a female Hindu, who had acquired the right to the property before the commencement of the Act, but was alleged to be no longer possessed of it because of having adopted a son before the commencement of the Act.
It was in these circumstances that the Court in that particular case was concerned with the question whether the female Hindu was possessed of the property in dispute or not at the time the Act came into force.
The Court was not laying down any general principle that section
14(1) will not be attracted at all to cases where the female Hindu was not possessed of the property at the date of the commencement of the Act.
In fact, there are no words used in section 14(1) which would lead to the interpretation that the property must be possessed by the female Hindu at the date of the 462 commencement of the Act.
It appears to us that the relevant date, on which the female Hindu should be possessed of the property in dispute, must be, the date on which the question of applying the provisions of section 14(1) arises.
If, on that date, when the provisions of this section are sought to be applied, the property is possessed by a female Hindu, it would be held that she is full owner of it and not merely a limited owner.
Such a question may arise in her own life time or may arise subsequently when succession to her property opens on her death.
The case before us falls in the second category, because Smt.
Harnam Kaur was a limited owner of the property before the commencement of the Act, and the question that has arisen is whether Smt.
Rattno was entitled to succeed to her rights in this disputed property on her death which took place in the year 1958 after the commencement of the Act.
The next case in which section 14 was considered by this Court was Brahmdeo Singh and Another vs Deomani Missir and Others(1) In that case, the female Hindu, who had succeeded to the property as the widow of her husband, Ramdeo Singh, had transferred the property under two sale deeds.
It was held that the sale deeds were not for legal necessity; and the question arose whether, in those circumstances, when the Act came into force, it could be held that the widow was possessed of that property.
This Court, after citing the judgment in the case of Gummalapura Taggina Matada Kotturuswami(2) held that the conflict of judicial opinion on this question had already been resolved in that earlier case, where the Court had observed : "The provisions in section 14 of the Act were not intended to benefit alienees who, with their eyes open, purchased the property from a limited owner without justifying necessity before the Act came into force and at a time when the vendor had only a limited interest of a Hindu woman.
" The ;Court further dealt with the contention that the possession of the alienees is the possession of the widow herself who is still alive, and held : "We are unable to accept this contention as correct.
It is well settled that an alienation made by a widow or other limited heir of property inherited by her, without legal necessity and without the consent of the next reversioners, though not binding on the reversioners, is, nevertheless, binding on her so as to pass her own interest (i.e. life interest) to the alienee.
" It was, thus, made clear in that case that the property was held not to be possessed by the widow, because, the alienation made by her being binding on her, she had no longer any legal right left in that property even in the sense of being in the state of owning it.
The case, thus, explains why, in cases of alienation or a gift made by a widow, even though that alienation or gift may not be bind (1) Civil Appeal No. 130 of 1960 decided on October 15, 1962.
(2) [1959] Supp. 1 S.C.R. 968.
463 ing on a reversioner, the property will not be held to be possessed by the widow, because the alienation or the gift would be binding on her for her life time and she, at least, would not possess any such rights under which she could obtain actual or constructive possession from her transferee or donee.
Having completely partted with her legal rights in the property, she could not be said to be possessed of that property any longer.
The third case of this Court brought to our notice is that of section section Minna Lal vs section section Rajkumar and Others(1).
In that case, a Digamber Jain of the Porwal sect died in 1934 leaving behind his widow, his son and three grand sons.
His son died in 1939.
In 1952, a son of one of the grandsons filed a suit for partition of the joint family properties, while the widow was still alive.
While the suit was still pending, the widow died.
Amongst other questions arising in the partition suit, one question that arose was whether the 1/4th share of the widow declared in the preliminary decree was possessed by her and whether, on her death, it descended to her grandsons in accordance with the provisions of sections 15 and 16 of the Act.
Dealing with this question, this Court explained the scope of section 14(1) by stating that, by section 14(1), the Legislature sought to convert the interest of a Hindu female which, under the Sastric Hindu law, would have been regarded as a limited interest into an absolute interest.
It was held that, by section 14(1), manifestly, it was intended to convert the interest, which a Hindu female has in property, however restricted the nature of that interest under the Sastric Hindu law may be, into absolute estate.
It was also noticed that "under the Sastric Hindu law, the share given to a Hindu widow on partition between her sons or her grandsons was in lieu of her right to maintenance, and she was not entitled to claim partition.
But the Legislature, by enacting the Hindu Women 's Right to Property Act, 1937, made a significant departure in that branch of the law; the Act gave a Hindu widow the same interest in the property which her husband had at the time of his death, and if the estate was partitioned, she became owner in severalty of her share, subject, of course, to the restrictions on disposition and the peculiar rule of extinction of the estate on death actual or civil.
" Applying these principles to the facts of that case, it was remarked : "In the light of the scheme of the Act and its avowed purpose, it would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to property.
If, under a preliminary decree, the right in favour of a Hindu male be regarded as property, the right declared in favour of a Hindu female must also be regarded as property.
The High Court was, therefore, in our judgment, in error in holding that the right declared in favour of Khilonabai (1) [1962] Supp.
3 S.C.R. 418.
464 was not possessed by her, nor are we able to agree with the submission of the learned counsel for Rajkumar that it was not property within the meaning of section 14 of the Act.
" In that case, it will be noticed that the widow died, while the suit for partition was still pending, and she was not in actual, physical or constructive possession of the property which was held to be possessed by her at the time of her death.
Only a preliminary decree declaring her right to the share had been passed.
That decree was passed before the Act came into force and the widow died after the Act came into force.
On these facts, the Court came to the finding that the disputed property was possessed by the widow; and this finding was given despite the circumstance that she was not in actual possession or constructive possession of the property, but had merely obtained the right to the property under the preliminary decree.
The principle laid down in that case, thus, supports the broader meaning given to the expression "possessed by" indicated by us earlier.
The last case of this Court brought to our notice is Eramma vs Veerupana and Others(1).
That was a converse case in which the female Hindu, in fact, did not possess any legal right or title to the property, though she was actually in physical possession of it.
It was held: "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title, whether before or after the commencement of the Act.
It may be noticed that the Explanation to section 14(1) sets out the various modes of acquisition of the property by a female Hindu and indicated that the section applies only to property to which the female Hindu has acquired some kind of title, however restricted the nature of her interest may be.
The words "as full owner thereof and not as a limited owner" as given in the last portion of sub section (1) of section 14 clearly suggest that the legislature intended that the limited ownership of a Hindu female should be changed into full ownership.
In other words, section 14 (1) of the Act contemplates that a Hindu female who, in the absence of this provision, would have been limited owner of the property, will now become full owner of the same by virtue of this section.
The object of the section is to extinguish the estate called "limited estate" or "widow 's estate" in Hindu Law and to make a Hindu woman, who, under the old law, would have been only a limited owner, a full owner of the property with all powers of disposition and to make the estate heritable by her own heirs and not revertible to the heirs of the last male holder.
" In the concluding part, it was held : "It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser.
In other words, the provisions of section 14(1) of the Act cannot be attracted in the case of a Hindu female who is in possession of the property (1) A.I.R. 1966 S.C. 1879.
465 of the last male holder on the date of the commencement of the Act when she is only a trespasser without any right to property.
" This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for cases where the Hindu female possesses the right of ownership of the property in question.
Even mere physical possession of the property without the right of ownership will not attract the provisions of this section.
This case also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the rights of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled.
The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could, in no manner, exercise her rights of ownership in that property any longer.
In this view that we have taken, it does not appear to be necessary for us to refer to the decisions of the various High Courts which were cited before us by learned counsel for the appellants.
The cases mentioned were : Sansir Patelin and Another vs Satyabatt Naikani and Another(1); Ganesh Mahanta and Others vs Sukria Bewa and Others(2); Harak Singh vs Kailash Singh and Another(3); Ram Gulam Singh and others vs Palakdhari Singh and others(4) ; Nathuni Prasad Singh and Another vs Mst.
Kachnar Kuer & Others(5); and Mst.
Mukhtiar Kaur vs Mst.
Kartar Kaur and Others(4).
All these were cases relating to situations where the widow had made some alienation of her rights in the property and none of them was concerned with a case where the female Hindu might have been dispossessed by a trespasser.
The reasons given by the High Courts in those cases are, therefore, of no assistance in deciding the applicability of section 14(1) of the Act to a case of the nature before us.
On the interpretation of section 14(1) of the Act that we have accepted above, it must be held that the property involved in the present suit was possessed by Smt.
Harnam Kaur when she died in the year 1958 and, consequently, Smt.
Rattno and, after her, the present respondents must be deemed to have succeeded to those rights.
We have already mentioned above that it was not disputed that, if it is held that Smt.
Hamam Kaur had become full owner of this property, it would pass on her death to Smt.
Rattno.
As a result, the decision given by the High Court must be upheld.
The appeal is dismissed with costs.
G. C. (1) A.I.R. 1958 Orissa 75.
(3) A.I.R. 1958 Patna 581.
(5) A.I.R. 1965 Patna 160.
Appeal dismissed.
(2) A.I.R. 1963 Orissa 167.
(4) A.T.R. 1961 Patna 60.
(6) A.I.R. 1966 Pun. | A Hindu widow in the Punjab came into possession of her husband 's land on his death in 1917.
She continued in possession till 1954 when on an application made by certain collaterals of her late husband the Naib Tehsildar effected a mutation in favour of the collaterals.
On the basis of the Naib Tehsildar 's order the collaterals dispossessed the widow.
She filed a suit for recovery of possession of the land.
After the institution of the suit the , came into force.
During the pendency of the suit, in 1958, the widow died and her daughter was substituted as legal representative.
The defendants pleaded that the widow had lost her right to the land because of her karewa marriage with one of the collateral&,, and that the daughter could not succeed to the land as she was not in possession of the land on the coming into force of the so as to become full owner of the land under section 14 thereof.
The trial court dismissed the suit but the first appellate court decreed it, holding that there was no karewa marriage as alleged by the defendants, and that section 14 was applicable to the case.
The High Court dismissed the appeal filed by the defendants who came to this court by special leave.
HELD : (i) The finding of fact by the first appellate court that there was no karewa marriage was binding on the defendants, and the High Court rightly accepted it.
It was not open to the defendants to challenge the finding in this Court.
[457H] (ii) The use of the expression "possessed by" instead of the expression "in possession of" in section 14(1) was intended to enlarge the meaning of this expression to cover cases of ion in law.
On the language of section 14(1) the provision will become applicable to any property which is owned by a female Hindu even though she is not in actual physical or constructive possession of the property.
[459C D; 460D] The section however will not apply to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could in no manner exercise her rights in that property any longer.
[465C] On the facts of the case the plaintiff widow had acquired full rights of ownership of the land under s 14 of the .
On her death in 1958 the property passed to her daughter.
The High.
Court, rightly dismissed the defendants, appeal.
[465G] Gimmalapura Taggina Matada Kotturuswami vs Setra Veerayya & Ors, [1959] Supp. 1 S.C.R. 968 and Brahmdeo Singh vs Deomani Missir C.A. No. 130/1960 dated 15 10 1962, distinguished.
455 section section Munna Lal vs section section Rajkumar, [1962] Supp. 3 S.C.R. 418 and Eramma vs Veerupana, A.I.R. 1965 S.C. 1879, applied.
Gaddam Venkayamma vs Gaddanz Veerayya, A.I.R. 1957 A.P. 280, Sansir Patelin & Anr.
vs Satyabati Naikani & Anr.
A.I.R. 1958 Orissa 75, Gajesh Mahanta vs Sukria Bewa, A.I.R. 1963 Orissa 167, Hapak Singh vs Kailash Singh & Anr.
A.I.R. 1958 Patna 581, Ram Gulam Singh vs Palakdhari Singh, A.I.R. 1961 Patna 60. ' Nathuni Prasad Singh vs Mst.
Kachnar Kuer, A.I.R. 1965 Patna 160 and Mst.
Mukhtiar Kaur vs Mst.
Kartar Kaur & Ors., A.I.R. 1966 Pun. 31, referred to. |
vil Appeal No. 1 of 1986 From the Judgment and Order dated 7.2.1986 of the Bombay High Court in W. P. No. 4802 of 1984 D.R. Thadani and Shri Narain for the Appellants.
N.N. Keshwani, R.N. Keshwani and Girish Chandra for the Respondents.
The Judgment of the Court was delivered by B.C. RAY, J.
The Maitrai Park Co operative Housing Society Ltd. has filed a dispute before the first Co operative Court, Bombay stating inter alia that the opposite party No. I Smt.
Mohini R. Adwani PG NO 34 who is a member of the society and was allotted flat No. 15 in Societies 'F ' building in scheme No. 1 at Chambur Bombay 71 inducted the appellant opposite party No. 2 without obtaining the prior written consent of the society in May 1969, on the basis of a leave and licence agreement for a period of 11 months.
The said society Maitrai Cooperative Housing Society Ltd. was divided into two units that is Maitrai Park Co op.
Housing Society Ltd., Chambur which is the owner of the building in Scheme No. I including Building No. F and the Maitrai Bijoy Co op.
Housing Society Ltd. Chembur 74 Scheme No. 2, by order of the Assistant Registrar Co operative Housing Society Ltd. Bombay.
By virtue of the division of the society the assets and liabilities so far as scheme No. 1 were taken over by the present disputant society, that is Maitrai Park Co operative Housing Society Ltd. and the members in respect of the said building in scheme No. I automatically became members of the society by the Order No. BCM/ HSG/4633 of 1970 from 6.8.1971.
The respondent opponent No. 2 automatically became a member of the disputed society in respect of the said flat No. 15 in 'F ' building.
The opposite party appellant who was occupying the premises unauthorisedly after the expiry of the period of the licence was asked to vacate the flat by the member of the society that is the respondent No. 2.
As he did not accede to the request the respondent No. 1 society had to take steps for evicting the appellant from the said flat so that the respondent No. 2 can occupy the same for her residence.
The society served a notice on the appellant for vacating the flat.
But the appellant did not vacate the flat.
Therespondent No. l, the housing society, filed a dispute before the Cooperative Court for eviction of the appellant who was in unauthorised occupation of the flat and who had been using the said residential flat by opening a canteen therein in violation of the bye laws framed by the society.
The appellant questioned jurisdiction of the Co operative Court to entertain the dispute on the ground that the dispute does not come within purview of Section 9 l of the Co operative Societies Act as he has been continuing in possession as licencee till the date of filing of the dispute and the respondent No. 1, the member of the society, has been receiving licence fees from him.
It has also been stated that in one of the receipts issued by the member.
The word rent ' has been used.
The appellant also pleaded that continuing as a licencee he has become a tenant under section l5A of the amended Bombay Rent Act on and from Ist of February, 1973.
The dispute is as such beyond the jurisdiction of the Co operative Court.
The Co operative Court after hearing the parties made an award holding that the dispute fell within the purview of section 9 l of the Maharashtra Co operative Societies Act, 1960 as the appellant is claiming to be in possession of the flat as licencee through a member of the PG NO 35 society.
It also held that there was no subsisting agreement of licence in favour of the appellant on the d ate of the enforcement of section 15A of the Bombay Rent Act and so the appellant had not become a deemed tenant.
Against this award an appeal was filed before the Maharashtra State Co op.
Appellate Court.
The appeal was dismissed and the award of the Co operative Court directing eviction of the petitioner from the Flat No. 15 was affirmed.
The appellant thereafter moved the High Court of Bombay in Writ Petition No. 4802 of 1984.
The said writ petition was dismissed with costs.
The appellant thereafter filed the instant special leave petition.
The facts of the case are more or less similar to the facts of C.A. No. 472 of 1985.
We have already held that the dispute in question comes within purview of Section 91 of the Cc operative Act as the appellants claim to be in possession of the flat through a member of the society which is a Co partnership Housing Society and Section 15A of the Bombay Rent Act does not apply as there was no subsisting agreement of licence on 1.2.1973.
Therefore, the judgment rendered by us in C.A. No. 472 of 1975 will also govern this case.
The appeal is, therefore.
dismissed without any order as to costs.
The decree will not be executed for a period of four months from the date of this order subject to the appellant 's filing an usual undertaking within a period of two weeks from today to the effect that the appellant will not transfer, assign or encumber the flat in question in any manner whatsoever and on undertaking that he will hand over peaceful possession of the flat question to the respondent on or before the expiry of the aforesaid period and he will go on paying the occupation charges equivalent to the amount he had been paying for each month by the 7th of succeeding month.
In default of compliance of any these terms,the decree shall become executable forthwith. | Mohini R. Adwani, a member of the Maitrai Co operative Housing Society Ltd., was allotted flat No.15 in Societies 'F ' building in Scheme No. I at Chambur Bombay 71.
She inducted the appellant in the premises aforesaid without obtaining the prior written consent of the society, on the basis of a leave & licence agreement for a period of 11 months.
The said society was divided by order of the Assistant Registrar Co operative Housing Society Ltd. Bombay into two units i.e Maitra Park Co operative Housing Society Ltd., Chambur (and the Maitra BUoy Co operative Housing Society Ltd., Chambur 74 Scheme No. 2) the former being the owner of the building in Scheme No. i including building No. F '.
Thus on division Smt.
Mohini R. Adwani automatically became a member of the disputed society in respect of the said flat No. 15 in `F ' building.
The appellant after the expiry of the period of the licence was occupying the premises unauthorisedly & was asked to vacate the flat by the member of the society.
As he did not accede to her request.
the society had to take steps for evicting the appellant from the said flat so that Respondent 2 could occupy the same for her residence.
The society accordingly served a notice on the appellant asking him to vacate the flat.
On his failure to vacate, the society filed a dispute before the Co operative Court for eviction of the appellant who was in unauthorised occupation of the premises and was using the residential flat for canteen purposes in violation of the bye laws framed by the Society.
The appellant questioned the jurisdiction of the Co operative Court to entertain the matter on the ground that the dispute in question does not come within the purview of section 91 of the Co operative Societies Act as he was continuing in possessing as licencee and the member of the Society was receiving licence fee from him till the date of filing the dispute.
He also asserted that in one of the receipts issued to him the word "rent" has been used.
He also pleaded that as a licencee he has became a tenant u/s 15A of the amended PG NO 33 Bombay Rent Act on and from 1st February, 1973.
The Co operative Court found against the appellant and made an award holding that the dispute is covered u/s 91 of the Maharashtra Co operative Societies Act, 1960 as the appellant is claiming to be in possession of the flat as licencee through a member of the Society.
It also held that there was no subsisting agreement of licence in favour of the appellant on the date of the coming into force of section 15A of the Bombay Rent Act and as such the appellant could not become deemed tenant.
Appellant 's appeal before the Maharashtra State Co operative Appellate Court having failed he moved the High Court by means of Writ Petition.
On dismissing the Writ Petition by the Bombay High Court, the appellant filed this appeal by special leave.
Following the Court 's Judgment in CA.
No. 472 of 1985, M section A. V.R. & Co. & Ors.
vs Fairfield Co operative Housing Society Ltd., [1988] Supp.
3 S.C.R. 84 Court dismissed the appeal, but directed that the decree should not be executed for a period of 4 months subject to the appellants filing usual undertaking.
The Court, HELD: That the dispute in question comes within the purview of section 91 of the Maharashtra Co operative Societies Act, 1960 as the appellant claims to be in possession of the flat through a member of the Society which is a Co partnership Housing Society and Sec.
15A of the Bombay Rent Act does not apply as there was no subsisting agreement of licence on 1.2.1973.
[34G H;35A] |
Appeal No. 852 of 1964.
Appeal by special leave from the judgment and decree dated August 24, 1962 of the Punjab High Court in Regular Second Appeal No. 843 of 1956.
Bishan Narain and A. G. Ratnaparkhi, for the appellant.
K. C. Nayyar and Mohana Behar Lal, for respondent No. 1.
790 The Judgment of the Court was delivered by Bhargava, J.
This appeal has come up as a result of a dis pute relating to succession to the property of one Sunder Singh.
Sunder Singh, on 4th November, 1950, executed a will in respect of his property in favour of his niece, Udham Kaur.
Subsequently, on 27th October, 1951, one Tarlok Singh executed a document divorcing his wife, Mst.
Angrez Kaur, respondent No. 1 in this appeal, on the ground that she frequently went away from his house without his consent and whenever he made enquiries from her, she became furious with him.
In the document, he recited that Mst.
Angrez Kaur was no longer his wife and that she had gone to live with Sunder Singh.
According to respondent No. 1 on this divorce being granted to her by her first husband, Tarlok Singh, she was married to Sunder Singh by a custom, known as 'Chadar Andazi '.
On 7th June, 1952, Sunder Singh revoked his previous will and, in that document, acknowledged Mst.
Ang rez Kaur as his wife and left the property to her.
Sunder Singh died in 1953.
Thereafter, the appellant, Gurdit Singh, who was a collateral of Sunder Singh in the third degree, applied for mutation.
On 12th December, 1954, mutation of the property left by Sunder Singh was sanctioned in favour of Gurdit Singh by the authorities.
Thereupon, Mst.
Angrez Kaur filed a suit on 17th March, 1955, claiming the property as widow of Sunder Singh.
The trial Court decreed the suit, holding that respondent No. I had married Sunder Singh by 'Chadar Andazi ' and the marriage was valid.
On appeal, the Additional District Judge set aside the decree of the trial Court and held that the marriage of Mst.
Angrez Kaur with Sunder Singh during the life time of her first husband, Tarlok Singh, was invalid and was not justified by any custom and, consequently, she could not be treated as the widow of Sunder Singh.
Respondent No. 1, there on, appeale to the High Court of Punjab and the learned Judge, who heard the appeal, felt that the question of custom had not properly tried by the trial Court and the first appellate Court.
Consequently he framed the following issue : "Is there any custom amongst the tribes of the parties according to which the divorce given by Tarlok Singh 'to Mst.
Angrez Kaur is recognised enabling her to enter into a valid marriage by Chadar Andazi with Sunder Singh?" This issue was remitted to the trial Court for recording a finding after giving the parties an opportunity to lead further evidence.
Further evidence was led in the trial Court which answered this issue in the negative and against respondent No. 1.
The District Judge, in his report, endorsed the view of the trial Court.
The High Court, however, held that the 7 91 custom was proved under which Mst.
Angrez Kaur could validly marry Sunder Singh, even though her first husband, Tarlok Singh, was alive, and, consequently decreed the suit.
Gurdit Singh appellant has now come up to this Court against this decree of the High Court by special leave.
As is clear from the facts narrated above, the, only issue that arose in this case was whether respondent No. 1, Mst.
Angrez Kaur, had succeeded in proving the existence of a custom in the community to which she belonged, according to which Tarlok Singh, her first husband, could divorce her, whereupon she was at liberty to enter into a valid marriage by Chadar Andazi with Sunder Singh, whose property is now under dispute.
The parties are residents of the District of Jullundur where, according to Gurdit Singh appellant, no such custom, as claimed by respondent No. 1 exists amongst the Jats, which is the caste to which the parties belong.
To urge this point, learned counsel for the appellant relied before us on 'The Digest of Customary Law ' by Sir W. H. Rattigan, and on the 'Riwaj i am ' recorded at the time of the settlement in 1885 and 1914 15.
It was argued that Rattigan 's Digest of Customary Law in the Punjab had always been treated as an authoritative exposition of the customs prevailing in the Punjab and had been accepted as such by the Privy Council as well as other Courts in India.
Reliance was placed on para 72 at page 471 of the 14th Edition of Rattigan 's, 'Digest of Customary Law ', where it is stated that "amongst Muhammadans of all classes a man may divorce a wife without assigning any reason; but this power, in the absence of a special custom, is not allowed to Hindus nor to females of any class".
In paragraph 74, he proceeds to lay down that "until the former marriage is validly set aside, a woman cannot marry a second husband in the life time of her first husband;" and in paragraph 75, it is stated that "A 'Karewa ' marriage with the brother or some other male relative of the deceased husband requires no religious ceremonies, and confers all the rights of a valid marriage.
" The marriage claimed by respondent No. 1 with Sunder Singh was described as a 'karewa ' marriage.
On the basis of the principles laid down in the above paragraphs, it was urged that it should be held that respondent No. I could not have entered into a valid marriage with Sunder Singh, while her first husband, Tarlok Singh, was alive.
It is, however, to be noted that in paragraph 72, Rattigan himself makes an exception to the general rule, and recognises the fact that, if there be a special custom, divorce can be resorted to even by Hindus.
In earlier paragraphs of his book, Rattigan has dealt with existence of special customs in the Punjab and, in dealing with L Sup.
CI/67 7 792 the Jats, he expressed the view that, as regards Jats, and specially Sikh Jats who hold very liberal views on questions relating to marriage and whose notions of sexual morality are lax, it will be difficult to enunciate any general principles as are opposed to public policy.
Then, he goes on to say that custom in the Punjab is primarily tribal and not local, though the custom of a particular tribe may and often does differ in particular localities.
Rattigon 's conclusion is expressed by saying that it seems to be clear that there is no uniform custom applicable to the whole of the Punjab.
Custom varies from time to time and from place to place.
It is in this background that we have to consider further remarks recorded by Rattigan in paragraph 72 mentioned above, where he says that, in one case, it was doubted whether, in Jullundur District, a Hindu fat can divorce his wife.
He also noticed a number of decisions relating to divorce in the surrounding districts in which it was held that the custom of divorce prevailed in almost identical terms in those districts.
This custom according to him, is that the husband is entitled to turn out his wife and, if he does so, she is entitled to remarry.
It was on the basis of these observations of Rattigan that it was urged before us that the High Court committed an error in relying on the circumstance that, in a number of surrounding districts, it was found that the custom of divorce amongst the Hindu Jats so prevalent could lead to an inference that a similar custom prevailed in the district of Jullundur also.
In Rattigan 's book, by itself, we are unable to find any proposition laying down that, in the district of Jullundur, there is any custom among Hindu fats permitting divorce as claimed by respondent No. 1.
In fact, Rattigan leaves the question open by saying that it has been doubted whether such a custom exists in the Jullundur District.
He also mentions the Riwaj i am of Jullundur District, but does not attach much importance to it on the ground of its being un reliable.
Rattigan 's book on 'Customary Law ', in these circumstances, appears to us to be of little help in arriving at a conclusion about the existence of a custom on divorce amongst the Jats in Jullundur District.
The only other document relating to Jullundur District available was the Riwaj i am of that district and learned counsel for the appellant placed great reliance on it.
He drew our attention to the decision of their Lordships of the Privy Council in Kunwar Basant Singh vs Kinwar Brij Rai Saran Singh(1) where their Lordships held "The value of the riwaj i am as evidence of customary law is well established before this Board; the most recent decision is (1) 62 I.A. 180.
79 3 Vaishno Ditti vs Rameshri(1), in which the judgment of the Board was delivered by Sir John Wallis, who states : "It has been held by this Board that the riwaj i am is a public record prepared by a public officer in discharge of his duties and under Government rules; that it is clearly admissible in evidence to prove the facts entered thereon subject to rebuttal; and that the statements therein may be accepted even if unsupported by instances.
" Reliance was also placed upon the principle laid down by this Court in Mahant Salig Ram vs Musammat Maya Devi(2), where this Court held : "There is no doubt or dispute as to the value of the entries in the Riwaj i am.
It is well settled that though they are entitled to an initial presumption in favour of their correctness irrespective of the question whether or not the custom, as recorded, is in accord with the general custom, the quantum of evidence necessary to rebut that presumption will, however, vary with the facts and circumstances of each case.
" The Court also approved of the principle laid down by the Lahore High Court, indicating the circumstances in which Riwaj i am can be held to prove a custom, and in that connection said : "It has been held in Qamar ud Din vs Mt. Fateh Bano(3) that if the Riwaj i am, oil which reliance is placed, is a reliable and trustworthy document, has been carefully prepared, does not contain within its four corners contradictory statements of custom, and in the opinion of the Settlement Officer is not a record of the wishes of the persons appearing before him as to what the custom should be in those circumstances the Riwaj i am would be a presumptive piece of evidence in proof of the special custom set up therein.
If, on the other hand, the Riwaj i am is not a document of the kind indicated above, then such a Riwaj i am would have no value at all as a presumptive piece of evidence.
" It is in the light of these principles that we have to examine the value to be attached to the Riwaj i am in Jullundur District which has been relied upon by learned counsel for the appellant.
The Riwaj i am of Jullundar District appears in the form of questions and answers and an extract of it has been placed before us.
In answer to the questions about the grounds on which a wife may be divorced, whether change of religion is a sufficient cause and whether,a husband may divorce his wife without (1) [1928] L. R. 55 I.A. 407,421, (2) (3) Lah. 110.
7 94 assigning any cause, the record states that among all Muhammadans except Rajputs the Muhammadan Law is followed; and a husband can divorce his wife without assigning any reason.
Among the Muhammadan Rajputs and all Hindus no divorce is recognised.
But an exception is mentioned that the Kambohs of the Nakodar Tahsil also divorce their wives.
They are not required to assign any cause.
In answer to the question as to what are the formalities which must be observed to constitute a revocable or an irrevocable divorce, is was stated that among Hindus there is no divorce except among Kambohs of the Nakodar Tahsil who give 'talaq ' by executing a written deed.
Reliance is placed on the entry in the Riwaj i am that the custom of divorce among Hindus does not exist in the Jullundur District to urge that the High Court wrongly held that respondent No. 1 could be divorced by her first husband, Tarlok Singh, and could validly marry Sunder Singh by Chadar Andazi.
It, however, appears that the Riwaj i am of Jullundur District is unreliable, and, according to the principle laid down by this Court in the case of Mahant Salig Ram(1), such a Riwaj i am cannot be held to prove that there was no custom of divorce among Hindus in this district.
It does not appear necessary to refer to the various decisions of the Lahore High Court on 'the question of unreliability of the Riwaj i am of Jullundur District.
It is enough to quote the latest decision of the East Punjab High Court in Mohammad Khalil and Another vs Mohammad Bakhsh(2).
In that case., Bhandari J., delivering the judgment of the Bench, reproduced the principle laid down by the Lahore High Court in Qamar ud Din & Others(3), which was later approved by this Court in the case of Mahant Salig Ram(1).
,and then proceeded to hold : "Unfortunately, the Riwaj i am of the Jullundur District cannot be regarded as a reliable or trustworthy document, for, it has been held in a number of decided cases, such as Zakar Hussain vs Ghulam Fatima(1), Ghulam Mohammad vs Balli(5), and Mt. Fatima vs Sharaf Din(1), that it has not been prepared with care and attention.
It seems to me, therefore, that it is impossible to accept the statements appearing therein at their face value." Learned counsel for the appellant, however, urged before us that all these cases, in which the Riwaj i am of Jullundur District ,was held to be unreliable, related either to the custom about the right of succession to property of a daughter against collaterals, (1) (3) A. I. R. (36) 1949 E.Pb.
(5) A. I. R. (1 4) 1927 Lab.
(2) I. I. R. (4) A. 1.
R. (18) (6) A. 1.
R. (33) 79 5 or about the right to execute wills and gifts.
None of these cases related to the custom of divorce and at least, insofar as it records that there is no custom of divorce amongst Hindus in this district, the Riwaj i am should be accepted.
There are two reasons why we must reject this contention.
The first is that the Riwaj i am having been found unreliable in respect of two customs, the inference clearly follows that it was not drawn up carefully and correctly and, consequently it would not be safe to rely even on other aspects of the Riwaj i am.
The second, and which is the more important reason, is that, in this particular case which is 'before us, the evidence tendered by both the parties shows that this Riwaj i am has incorrectly recorded the custom about the right of a Hindu husband of this district to divorce his wife.
Respondent No. 1, in order to prove her case as to the existence of the custom, has primarily relied on two pieces of evidence.
The first piece of evidence consisted of the Riwaj i am of the neighbouring districts where there was a clear record that the custom of divorce among Hindu Jats existed.
The existence of such a custom.
in the neighbouring district, which surround the Jullundur District all around, is certainly a relevant consideration for an inference that such a custom may be prevalent in the Jul lundur District also, particularly in view of Rattigan 's opinion that the custom is primarily tribal though also local.
If the custom existed among the tribes of Hindu Jats in all the districts surrounding the district of Jullundur, it is probable that a similar custom exists in the district of Jullundur also.
The other piece of evidence relied upon was the statements of a number of witnesses examined to prove that not only such a custom existed, but also that instances were available showing that there had been divorces in recent times.
Respondent No. 1 has examined nine witnesses in this behalf.
The learned District Judge, in his report, did not place full reliance on the testimony of these witnesses, but their evidence has been accepted by the High Court.
On behalf of the appellant also, a number of witnesses were examined to prove the non existence of a custom of divorce.
It, however, appears that the appellant 's own witnesses belied his case.
Several of those witnesses clearly admitted that in this district a custom did exist permitting a husband to divorce his wife.
Three of the witnesses, Bhag Singh, Karam Singh and Kartar Singh, who were examined on behalf of the appellant, in their examination in chief itself, mentioned a custom under which a Zamindar could divorce his wife, though they added that, if the husband divorces his wife, the wife cannot contract Chadar Andazi during the life time of her husband.
Ujagar Singh, another witness, in his cross examination clearly admitted that the husband can divorce his wife, but a wife cannot divorce her husband.
He can divorce her both verbally as well as in writing.
Similarly, Niranjan Singh, another 796 witness, stated that a husband can divorce his wife, but a wife cannot divorce her husband.
Gurdit Singh, in his examination in chief, mentioned that a husband and wife could live separate from each other and, in such a case, the wife could not contract Chadar Andazi during the life time of her first husband, and added that, if she contracted Chadar Andazi, she could not inherit the property of her second husband.
In cross examination, he stated that "there is no custom among us for divorcing the wives with mutual consent".
All these witnesses examined on behalf of the appellant himself thus proved the existence of a custom under which a Hindu Jat in the district of Jullundur could divorce his wife, though all of them added a qualification that, in case a wife is divorced by a Hindu husband, she is not entitled to a second marriage during the life time of her first husband.
They all admit that a custom permitting, a Hindu Jat to divorce his wife does actually exists in the district of Jullundur.
Some of them, at some stages of their evidence, tried to distinguish the right of a husband by saying that he could desert his wife or that there ,could be separation between the husband and the wife, but, at ,other stages, they admitted in clear words that the custom recognised included the right of the husband to divorce his wife.
Thus, the record in the Riwaj i am that there is no such custom of divorce among the Hindus of the Jullundur District, is proved to be incorrect not only by the evidence of the witnesses examined ,on behalf of respondent No. 1, but even from the evidence given by the witnesses of the appellant.
In these circumstances, we hold that there is no force at all in the submission of the learned counsel that this Riwaj i am could be held to be reliable insofar as it records the absence of the custom, on the mere ground that in earlier cases the unreliability of this Riwaj i am was found in regard to record of customs relating to other matters.
There is no doubt that the witnesses examined on behalf of the appellant, while admitting the existence of a custom permitting a Hindu husband to divorce his wife, have added a qualification that, if such a divorce is brought into effect by a husband, the wife cannot legally contract a second marriage during his lifetime.
This limited custom sought to be proved by these witnesses does not.
find support from the Riwaj i am, nor is it in line with the principles laid down by Rattigan in his book on 'Customary Law '.
All that he stated in paragraph 74 of his book was that " until the former marriage is validly set aside, a woman cannot marry a second husband in the life time of her first husband.
" We have already held that, even according to the witnesses exa mined by the appellant, a custom exists which permits a valid divorce by a husband of his wife and that would dissolve the marriage.
On the dissolution of such a marriage, there seems to be no reason why the divorced wife cannot marry a second 797 husband in the life time of her first husband.
It also appears to us incongruous to accept the proposition put forward on behalf of the appellant that, though a wife can be divorced by her husband, she is not at liberty to enter into a second marriage and thus secure for herself means for proper living.
In these circumstances, the High Court committee no error in accepting the evidence given by witnesses examined on behalf of respondent No. 1 who stated that the custom as prevailing in the Jullundur District not only permitted divorce, but also recognised the validity of second marriage of the divorced wife even in the life time of her first husband.
The High Court was further right in relying on the instances proved by the evidence of these witnesses of respondent No. 1 showing that a number of divorced wives had actually contracted second marriages in the life time of the in husbands and these, marriages were recognised as valid marriages by the members of 'their community.
The appeal, consequently, fails and is dismissed with costs.
G.C. Appeal dismissed. | S married A after the latter had been divorced by her husband T.
The parties were Jats of Jullundur District in the Punjab.
After the death of S a collateral of his got the lands of S mutated in his favour.
A then filed a suit claiming the land as widow of section Her marriage to S was challenged on the ground that there was no custom among the Jats of Jullundur District permitting a divorced woman to remar ry in the life time of her first husband, The, entries in the Rattilgan 's digest and the Riwaj i am of Jullundur District came up for consideration.
HELD : Rattigan 's digest was not of help in arriving at a conclusion about the existence of such a custom of divorce among the Jats in Jullundur District. 'Me Riwaj i Am of Jullundur District was unreliable as it had been so held by courts.
[792 F G; 795 A C] On the basis of the existence of a custom of divorce among the Jats of districts surrounding Jullundur District and on the basis of oral evidence adduced in the case, the High Court rightly held that a custom of divorce existed among the Jats of Jullundur District, and the custom permits the divorced women to marry in the life time of her first hus band.
The divorce of A by T being valid her subsequent marriage to S was also valid, and accordingly she was entitled to succeed to S 's property.
L797 B C] Basant Singh vs Kunwar Brij Rai Saran Singh, 62 I.A. 180, Vaishnoo Ditt vs Rameshri, (1928) L.R. 55 I.A, 407, Mahant Salig Ram vs Musammat maya Devi , Qamar ud din vs Mt. Fateh Bano, Lab. 110, Muhammad Khalil vs Mohammad Baksh.
A.I.R. (36) 1949 E. Pb. 252, Zakar Hussain vs Ghulam Faima, A.I.R. (14) 1927 Lab. 261, Ghulam Mohammad vs Ball, A.I.R. (18) 1931 Lab. 641 and Mt. Fatima vs Sharaf Din, A.I.R. (33) 1946 Lab. 426, referred to. |
Appeal No. 185 of 1966.
Appeal by special leave from the judgment and order dated March 20, 1962 of the Mysore High Court in Writ Petition No. 109 of 1960.
A.K. Sen, R. Ganapathy Iyer and R. Gopalakrishnan, for the appellants.
D.Narsaraju, T. A. Ramachandran and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought, by special leave, from the judgement of the Mysore High Court dated March 20, 1962 dismissing writ petition No. 109 of 1960.
The appellants had prayed therein for the grant of writ for quashing a. notice dated January 16, 1960 issued by the respondent under section 15 of the Excess Profits Tax Act, 1940 (Act XV of 1940), hereinafter called the 'Act ', calling upon the appellants to submit a return of the standard profits and the profits actually made during the chargeable accounting period from October 30, 1943 to October 30, 1944 on the ground that the profits had been under assessed.
The appellants carried on a business constituting themselves into a partnership called 'Guduthur Thimmappa & Brothers in 1934.
On the date of commencement of the business the part ners were G. Thimmappa, G. Ekambarappa, and G. Padmanabhan, each of the partners representing their respective joint families.
The business of the firm was in Bellary town and the partners of the firm were residents of Bellary town during the period the firm was carrying on business.
The, firm was dissolved on October 16, 1944.
Thimmappa, one of the partners, died on April 13, 1955.
For the chargeable accounting period from October 30, 1943 to April 30, 1944, the Excess Profits Tax Officer had taken steps to assess the "escaped" profits of the firm.
He issued the necessary notices to G. Padmanabhan and G. Ekambarappa as the partners of the dissolved firm.
He also issued notice to G. M. Prabhu and G. Lakshmidevamma as the representatives of G. Thimmappa.
The contention of the appellants, before the High Court was that as from November 1, 1956 the Act must be 866 deemed to have been repealed so far as Bellary district is concerned and therefore the respondent was not competent to take any proceedings for determining the escaped income under section 15 of that Act.
The High Court rejected the contention on the ground that, though the Act stood repealed by reason of the inclusion of Bellary district in Mysore State, the liability to pay tax on the escaped profits continued by virtue of section 6 of the General Clauses Act.
The question to be considered in this appeal is whether the appellants continued to be liable to be proceeded against under section 15 of the Act on the profits which had escaped taxation.
The present Bellary district was a part of the old Madras State which was a Part "A" State under the Constitution of India till its merger with the Mysore State on October 1, 1953 which was a Part "B" State.
The Mysore State continued to be a Part "B" State till November 1, 1956.
The Act extended, when first promulgated, to.
the territory of former British India.
After the Constitution came into force, section 1(2) of the Act was adapted so as to extend the operation of the Act "to the whole of India except Part 'B ' States" by the Adaptation of Laws Order, 1950.
After the formation of new States in pursuance of the States Reorgani sation Act, 1956 (Act 37 of 1956), sub section
(2) of section 1 of the Act was adapted by the President by Adaptation of Laws (No. 3) Order, 1956 dated December 31, 1956.
Section 1(2) of the Act as adapted read as follows : "It extends to the whole of India except the territories which immediately before the 1st November, 1956 were comprised in part 'B ' state." The result of the adaptation was that all the provisions of the Act stood repealed so far as the district of Bellary was concerned with effect from December 31, 1956.
It was contended on behalf of the appellants that it is not a case of repeal of the Act and so the provisions of section 6 of the General Clauses Act could not be invoked to sustain the validity of the notices issued by the respondent under section 15 of the Act.
It was argued that so far as the Act was con cerned, the Adaptation of the Laws Order, 1956 only modified the provisions of section 1 (2) of the Act and did not repeal the Act as such and the effect of the modification was that the provisions of the Act were no longer applicable to the Bellary district which was comprised in the territory of Part 'B ' State of Mysore immediately before November 1, 1956.
In our opinion there is no justification for the argument put forward on behalf of the appellants.
The result of the Adaptation of Laws Order, 1956 so far as the Act was concerned, was that the provisions of that Act were no longer applicable or in force in Bellary district.
To put it differently, the Act was repealed so far as the area of Bellary 8 6 7 district was concerned.
Repeal of an Act means revocation or abrogation of the Act and, in our opinion, section 6 of the General Clauses Act applies even in the case of a partial repeal or repeal of part of an Act.
Section 6 of the General Clauses Act states "Effect of repeal.
Where this Act or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or Section 3(19) of the General Clauses Act defines an "enactment" as including "a Regulation and also as including any provision contained in any Act or in any such Regulation as aforesaid".
The argument was also stressed on behalf of the appellants that even if section 6(c) of the General Clauses Act was applicable there was no "liability incurred or accrued" as there was no assessment of escaped profits before November 1, 1956 when the adaptation was made.
We do not think there is any substance in this argument.
The liability of the appellants to tax arose immediately at the end of the chargeable accounting period and not merely at the time when it is quantified by assessment proceedings.
It follows therefore that the notice issued under section 15 of the Act was legally valid and the appellants representing the original partners of the firm continued to be liable to be proceeded against under that section for the profits which had escaped taxation.
In Wallace Brothers and Co. Ltd. vs Commissioner of income tax(1), the Judicial Committee expounded in clear terms the scope of a tax liability under the Income tax Act.
It was observed by the Judicial Committee as follows : ". . the rate of tax for the year of assessment may be fixed after the close of the previous year and the assessment will necessarily be made after the close of that year.
But the liability to tax arises by virtue of the charging section alone, and it arises not later than the close of the previous year, though quantification of the amount payable is postponed.
" The same view has been expressed by this Court in Chatturam Horilram Ltd. vs C.I.T. (2) in which the legal position was reviewed (1) , 244.
(P.C.) (2) 868 with regard to the question of charge to income tax.
In that case, the assessee company carrying on business in Chota Nagpur was assessed to tax for the year 1939 40, but the assessment was set aside by the Income tax Appellate Tribunal on March 28, 1942, on the ground that the Indian Finance Act, 1939, was not in force during the assessment year 1939 40, in Chota Nagpur which was a partially excluded area.
On June 30, 1942, a Regulation was promulgated by which the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively as from March 30, 1939.
Thereupon the Income tax Officer made an order holding that the income of the assessee for the year 1939 40 had escaped assessment and issued to the assessee a notice under section 34 of the Income tax Act.
The validity of the notice was questioned.
It was held by th Court that though the Finance Act was not in force in that area in 1939 40, the income of the assessee wasliable to tax in that year and, therefore, it had escapdently of the passing of the Finance Act but until the Finance Act It was pointed out that the income was chargeable to tax independing dently of the passing of the Finance Act but until the Finance Act was passed no tax could be actually levied.
The same principle was reiterated by this Court in Kalwa Devadattam vs Union of India(l).
The question in that case was whether the liability of a Hindu undivided family arose before or after partition of the family.
In that case, this Court speaking through Shah, J. stated in clear terms thus : "Under the Indian Income tax Act liability to pay income tax arises on the accrual of the income, and not from the computation made by the taxing authorities in the course of assessment proceedings; it arises at a point of time not later than the close of the year of account.
" The same view has been taken in a recent case by this Court in State of Kerala vs N. Sami lyer (2 ) .
In view of the principle expressed in these authorities we are of the opinion that the liability to pay excess profits tax accrued immediately at the end of the chargeable accounting period and that liability was preserved under section 6 (c) of the General Clauses Act even though the Act stood repealed so far as Bellary district was concerned with effect from November 1, 1956.
Mr. Narsaraju contended in the alternative that on the combined operation of section 53 of the Andhra Pradesh Act (Act 30 of 1953) and s ' 119 of the State Reorganisation Act (Act 37 of 1956) all the provisions of the Excess Profits Tax Act, 1940 remained in operation in Bellary district in spite of the Adaptation of Laws Order, 1956.
Section 53 of the Andhra Pradesh Act states as follows: (1) (2) A.I.R. 1966 S.C. 1415.
8 69 .lm15 "The provisions of Part 11 shall not be deemed to have effected any change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to the State of Madras or of Mysore shall, until otherwise provided by a competent Legislature or other competent authority, continue to have the same meaning. " .lm0
Section 119 of the State Reorganisation Act reads as follows "The provisions of Part It shall not be deemed to have effected any change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to an existing State shall, until otherwise provided by a competent Legislature or other competent authority, be construed as meaning the territories within that State immediately before the appointed day.
" Section 120 of this Act states : "For the purpose of facilitating the application of any law in relation to any of the States formed or territorially altered by the provisions of Part II, the appropriate Government may, before the expiration of one year from the appointed day, by order make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent Legislature or other competent authority.
Explanation.
In this section, the expression "appropriate Government" means (a) as respect any law relating to a matter enumerated in the Union List, the Central Government; and (b) as respects any other law, (i) in its application to a Part A State, the State Government, and (ii) in its application to a Part C State, the Central Government.
" it was pointed out that the Act was in force in Bellary district When the Constitution came into force and the effect of section 53 of the Andhra Pradesh Act was to continue the operation of that Act so far as Bellary district was concerned.
The effect of section 119 870 of the State Reorganisation Act was to preserve the territorial operation of the law which was immediately in force before the date of the promulgation of that Act until such law was repealed by the competent legislature or a competent legislative authority.
There is great force in.
the argument advanced by Mr. Narsaraju on this point.
But it is not necessary for us to express any concluded opinion on this aspect of the case because we have already given reasons for holding that the appeal must be dismissed on the ground that the Act stood repealed by reason of the Adaptation of Laws Order, 1956 and the liability to pay tax on escaped profits continued under section 6 of the General Clauses Act.
We accordingly affirm the judgment of the Mysore High Court dated March 20, 1962 and dismiss this appeal with costs.
G.C. Appeal dismissed. | The District of Bellary originally belonged to the Part 'A ' State of Madras in British India.
On October 1. 1953 it merged in the Part 'B ' '.State of Mysore.
The Excess Profits Act, 1940 applied only to British India.
When Bellary District went to the Part 'B ' State of Mysore the Act ceased to apply to it.
After the , Mysore also became a Part 'A ' State.
But according to section 1(2) of the Adaptation of Laws (No. 3) Order dated December 31, 1956.
the aforesaid Excess Profits Tax Act was to extend "to the whole of India ,except the territories which immediately before November 1, 1956 were comprised in a Part 'B ' State.
" In 1960 the Excess Profits Tax Officer, Bellary gave a notice to the appellants under section 15 of the Act in respect of the period October 30, 1943 to October 30, 1944.
The appellants objected that the Act did not apply to Bellary district as immediately before November 1, 1956 it was in a Part 'B ' State.
The plea was rejected by the departmental authorities as well as by the High Court in a writ petition under article 226 of the Constitution.
In appeal.
by special leave, to this Court it was contended that so far as Bellary District was concerned it was not a case of repeal but only of non application of the Act, and thus section 6 of the General Clauses Act was not attracted.
It was further urged that even if section 6 applied no liability bad accrued or been incurred in terms of cl.
(e) of the section as there was no assessment of escaped profits before November 1, 1956 when the adaptation was made.
HELD : (i) The result of the Adaptation of Laws Order 1956 so far as the Act was concerned, was that the provisions of the Act were no longer applicable or in force in Bellary district.
To put it differently, the Act was repealed so far as the area of Bellary district was concerned.
Repeal of the Act means revocation or abrogation of the Act and section 6 of the General Clauses Act applies even in the case of a partial repeal, or repeal of part of an Act.
[866H; 867A] (ii)The case was covered by section 6(e) of the General Clauses Act.
The liability of an assessee to tax arises immediately at the end of the chargeable accounting period and not merely at the time when it is quantified.
by assessment proceedings.
It followed therefore that the 865 notice issued under section 15 of the Act was legally valid and the appellants representing the original partners of the firm continued to be liable to be proceeded against under that section for the profits which had escaped taxation.
[867 E F] Wallace Brothers & Co. vs Commissioner of Income tax, , Chatturam Horilram Ltd. vs C.I.T., ; Kalwa Devaduttam vs Union of India, and State of Kerala V. N. Same lyer, A.I.R. 1966 S.C. 1415, relied on. |
Appeal No. 462 of 1957.
Appeal by special leave from the judgment and decree dated April 18,1952, of the former Nagpur High Court in First Appeal No. 88 of 1942.
C.B. Agarwala and K. P. Gupta, for the appellant No. 1.
Har Dayal Hardy and N. N. Keswani, for respondent No. 1. 1961.
March 16.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by special leave is directed against the judgment and decree of the High of Judicature at Nagpur confirming the judgment of the 2nd Additional District Judge, Jabalpur in Civil Suit No. 9 A of 1942, filed by respondents 2 to 7 herein claiming to be the reversioners of the estate of one Raja Ajitsingh.
Ajit Singh was the Raja of Saliya Estate consisting of 73 villages and other property situate in Jabalpur and Saugor Districts.
Ajit Singh died on January 2, 1910, leaving behind him two widows named Rani Khuman Kuar and Rani Anant Kuar and an illegitimate son named Ramraghuraj Singh.
Rani Anant Kuar died in or about 1914 and Rani Khuman Kuar passed away on February 1, 1922.
After the death of Raja Ajit Singh, the Estate was taken over by the Court of Wards on behalf of the widows in the year 1913 and remained in its possession till March 27, 1923.
After the death of Rani Khuman Kuar, the local Government issued a notification recognizing Ramraghuraj Singh as the successor to the Estate; but, for one reason or other, the 349 Court of Wards continued to manage the Estate on his behalf from September 23, 1923.
Ramraghuraj Singh died on April 23, 1932, and on his death the, first respondent, the son of Ramraghuraj Singh, was, declared as the ward of the Court of Wards which continued to manage the Estate on his behalf Respondents 2 to 6, claiming to be the reversioners to the Estate of Raja Ajit Singh, filed a suit on June 15, 1935, for recovery of possession of the Estate.
Appellants 1 and 2 are alleged to be the assignees pendente lite of the interest of the alleged reversioners.
The plaintiffs averred that RamraLhurai Singh was the son of one Jhutti by her husband one Sukhai and that as Raja Ajit Singh had no issue, he and the Ranies treated the boy as their son, that the Lodhi community to which Raja Ajit Singh belonged was not a sudra caste and that, therefore, even if Ramraghuraj Singh was the illegitimate son of Raja Ajit Singh, he was not entitled to a share, and that in any view half of the share of the widows in the Estate would devolve, on their death, on the reversioners to the exclusion of the illegitimate son.
They further pleaded that the possession of the Court of Wards of the entire Estate from January 2, 1910 to February 1, 1922, was adverse to the illegitimate son and, therefore, he lost his title, if any, to the said Estate.
The case of the first respondent was that Raja Ajit Singh belonged to the sudra caste, that Ramraghuraj Singh was the son of the said Raja by a continuously and exclusively kept concubine named Raj Dulari, that the widows never questioned the right of Ramraghuraj Singh to a share in the property of Raja Ajit Singh, that therefore there was no scope for the plea of adverse possession, and that, after the death of the widows, the succession to the Estate of Raja Ajit Singh in respect of one half share opened out and the illegitimate son, he being the nearest heir, succeeded to that share also.
The trial court as well as the High Court concurrently gave the following findings: (1) Raja Ajit Singh belonged to the sudra caste; (2) Raja Raghuraj Singh was the son of Raja Ajit Singh by a continuously and 350 exclusively kept concubine by name Raj Dulari, who had passed into the coneubinage of Raja Ajit Singh after the death of her husband; (3) as the illegitimate son of Raja Ajit Singh, Ramraghuraj Singh succeeded to a moiety of the Estate of his putative father and the two widows of Raja Ajit Singh succeeded to the other moiety of his Estate; (4) as there was no daughter or daughter 's son, after the death of the widows, Ramraghuraj Singh, being the sole surviving heir of his putative father, inherited a moiety of the Estate which was held by the widows during their lifetime; (5) Ramraghuraj Singh was all along in joint possession of the Estate with the widows, and, although the Court of Wards had assumed superintendence on behalf of the Ranies, he was not out of possession during their lifetime and as such his title could not be extinguished by adverse possession; (6) the plaintiffs ' suit was barred under section 26 of the Central Provinces Court of Wards Act; and (7) the plaintiffs ' claim was barred by limitation.
While the trial court held that it had not been established that the plaintiffs were the reversioners of Raja Ajit Singh, the High Court held that it had been proved.
In the result the trial court dismissed the suit and, on appeal, the High Court confirmed it.
The 2nd appellant died and his legal representatives were not brought on record and the appeal so far as the 2nd appellant is concerned has abated.
The 1st appellant alone proceeded with the appeal.
It is the usual practice of this Court to accept the concurrent findings of the courts below.
There are no exceptional circumstances in this case, at any rate none was brought to our notice, to compel us to depart from the usual practice.
We, therefore, accept the concurrent findings, namely, that Raja Ajit Singh was a member of the sudra caste and that Ramraghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine named Raj Dulari, who passed into his concubinage after the death of her husband.
The main question that arises in this appeal is whether an illegitimate son of a sudra vis a vis his selfacquired property, after having succeeded to a half 351 share of his putative father 's estate, will be entitled to succeed to the other half share got by the widow, after the succession opened out to his putative father on the death of the said widow.
The answer to the question depends upon the content of the right of an illegitimate son to succeed to the self acquired property of his putative father.
The source of his right is found in the relevant Hindu Law texts.
Mitakshara in explanation of the texts of Manu and Yajnavalkya says in Chapter 1, section 12, in the following three verses thus: "1.
The author next delivers a special rule concerning the partition of a Sudra 's goods. 'Even a son begotten by a Sudra on a female slave may take a share by the father 's choice.
But, if the father be dead, the brethren should make him partaker of the moiety of a share: and one, who has no brothers, may inherit the whole property, in default of daughter 's sons '.
2.The son, begotten by a Sudra on a female slave, obtains a share by the father 's choice, or at his pleasure.
But, after the demise of the father, if there be sons of a wedded wife, let these brothers allow the son of the female slave to participate for half a share: that is, let them give him half as much as is the amount of one brother 's allotment.
However, should there be no sons of a wedded wife, the son of the female slave takes the whole estate, provided there be no daughters of a wife, nor sons of daughters.
But, if there be such the son of the female slave participates for half a share only.
3.From the mention of a Sudra in this place it follows that the son begotten by a man of a regenerate tribe on a female slave, does not obtain a share even by the father 's choice, nor the whole estate after his demise.
But, if he be docile, he receives a simple maintenance.
" No mention of a widow is found in the above verses, but in Dattaka Chandrika, the author says in V. 30,31 thus: "If any, even in the series of heirs down to the 352 daughter 's son, exist, the son by a female slave does not take the whole estate, but on the contrary shares equally with such heir." The leading decision on the rights of an illegitimate son is that of the Judicial Committee in Raja Jogendra Bhupati Hurri Chundun Mahapatra vs Nityanund Mansingh (1).
There, one Raja died leaving behind him a legitimate son and an illegitimate son.
On the death of the legitimate son, who had succeeded to the Raja, it was held that the illegitimate son succeeded to him by survivorship.
Sir Richard Couch cited two verses from Mitakshara Chapter 1, section 12.
We have already extracted the said verses.
Commenting upon these verses, the learned Judge observed at P. 132 thus: "Now it is observable that the first verse shews that during the lifetime of the father the law leaves the son to take a share by his father 's choice, and it cannot be said that at his birth he acquires any right to share in the estate in the same way as a legitimate son would do.
But the language there is very distinct, that "if the father be dead the bre thren should make him partaker of the moiety of a share".
So in the second verse the words are that the brothers are to allow him to participate for half a share, and later on there is the same expression: "The son of the female slave participates for half a share only".
" On that interpretation, he accepted the view of the Bombay High Court and held that an illegitimate son and a legitimate son, being members of an undivided Hindu family governed by Mitakshara, the illegitimate son becomes entitled to the whole of the immoveable property of the family if the legitimate son dies without any male issue.
The Judicial Committee again considered the right of an illegitimate son in Kamulammal vs Visvanathaswami Naicker (2).
There it was held that in a competition between a widow and an illegitimate son to the property of his putative father, the illegitimate son takes half of the (1) (1890) L.R. 17 I.A. 128.
(2) (1922) L.R. 50 I.A. 32.
353 property and the widow the other half.
Sir Lawrence Jenkins observed at p. 37 thus: "Here the contest is between the illegitimate son and the widow, and though the widow is not named in the text it is well settled that as a preferential heir to the daughter 's son she is included among those who share with the illegitimate son, and it would serve no useful purpose to speculate why she was not mentioned in the text.
" The status of the illegitimate son was subject of further scrutiny by the Privy Council in Vellaiyappa Chetty vs Natarajan (1).
There the question arose in the context of an illegitimate son 's right to maintenance from a joint family property after the death of his father who left no separate property.
The Judicial Committee held that he was entitled as a member of the family to maintenance out of the joint family property in the hands of the collaterals with whom the father was joint.
In dealing with the question of status of an illegitimate son, Sir Dinshah Mulla, speaking for the Court, after considering the relevant Hindu Law texts and decisions, arrived at the following conclusion at p. 15: "On a consideration of the texts and the cases on the subject their Lordships are of opinion that the illegitimate son of a Sudra by a continuous concubine has the status of a son, and that he is a member of the family; that the share of inheritance given to him is not merely in lieu of maintenance, but in recognition of his status as a son;. . .
It is not necessary to multiply decisions.
The law pertaining to the right of inheritance of an illegitimate son to his putative father 's; self acquired property may be stated, thus: An illegitimate son has the status of a son under the Hindu Law and he is a member of the family.
But his rights are limited compared to those of a son born in wedlock.
He has no right by birth and, therefore, he cannot demand partition during his father 's lifetime.
During the lifetime of his father, the law allows the illegitimate son to take (1) Mad.
1. 45 354 only such share as his father may give him.
But on his father 's death, he takes his father 's self acquired property along with the legitimate son and in case the legitimate son dies, he takes the entire property by survivorship.
Even if there is no legitimate son, the illegitimate son would be entitled to a moiety only of his father 's estate when there is a widow, daughter or daughter 's son of the last male holder.
In the absence of any one of the three heirs, he succeeds to the entire estate of his father.
From the premises it follows that an illegitimate son, except to the extent circumscribed by the.
Hindu Law texts, has the status of a son and is heir to the self acquired property of his putative father.
If that be his undoubted right under the Hindu Law, on what principle can he be deprived of his right of succession to the other moiety of his father 's property after the death of the widow? Under the Hindu Law, the death of the widow opens inheritance to the reversioners and the nearest heir at the time to the last full owner becomes entitled to possession.
When the succession opens, in a competition between an illegitimate son and other reversioners, the illegitimate son is certainly a nearer heir to the last male holder than the other reversioners.
If he was the nearest heir only yielding half a share to the widow at the time of the death of his putative father, how does he cease to be one by the intervention of the widow 's estate? As on the death of the widow the estate reverts back to the last male holder, the succession shall be traced to him, and, if so traced, the illegitimate son has a preferential claim over all other reversioners.
In Mayne 's Hindu Law, 11th edn., this position has been controverted in the following manner at p. 637: "The illegitimate Bon, though he inherits on the death of his putative father, along with or in default of male issue, widow or daughter, cannot come in as a reversionary heir on the death of the widow or daughter, as he is undoubtedly neither a sagotra nor a bhinnagotra sapinda of the last, male holder within the text of Manu.
" We regret our inability to accept this proposition.
355 for, if accepted, we would be speaking in two voices.
Once it is established that for the purpose of succession an illegitimate son of a Sudra has the status of a son and that he is entitled to succeed to his putative father 's entire self acquired property in the absence of a son, widow, daughter or daughter 's son and to a share along with them, we cannot see any escape from the consequential and logical position that he shall be entitled to succeed to the other half share when succession opens after the widow 's death.
The intervention of the widow only postpones the opening of succession to the extent of half share but it cannot divert the succession through a different channel, for she cannot constitute herself a new stock of descent.
The opinion expressed in Mayne 's Hindu Law is sought to be supported by the author by reference to a decision of the Madras High Court in Karuppayee Ammal vs Ramaswami (1).
But a reference to that judgment shows that no such proposition has been laid down therein.
There the facts were that on the death of a sudra, the last male owner of an estate, his widow succeeded to a moiety thereof and his illegitimate son to the other moiety; the widow then died leaving behind her a son of the daughter of the last male owner and the illegi timate son above mentioned.
The Madras High Court held that the daughter 's son was entitled to the moiety that had vested in the widow and the illegitimate son was not entitled to any portion thereof.
The reason for that conclusion is found at p. 868 and it is: "The principle underlying the doctrine of reverter referred to is that the last male holder 's estate is inherited by females who have no free right of alienation and who hold a peculiar kind of estate called "woman 's estate" and on whose death the then heir of the last male holder succeeds to the last male holder 's estate.
From its very nature, the doctrine could not apply legitimately to a case where the last male holder 's estate vested on his death not in a female heir but in a male heir also.
In such a case, the doctrine as such would not strictly apply, nor has it been, so far as we are aware, applied to such a case." (1) Mad.
356 The reason of the decision is therefore clear and that is when a daughter 's son succeeds to an estate, there is no further scope for the application of the doctrine of reverter.
The learned Judges expressly left open the present question when they said, "We are not now concerned with the question as to what would become of the property if the last of the daughters died without leaving a daughter son, in such circumstances".
This decision cannot, therefore, be invoked in support of the contention that in a case where the doctrine of reverter applies the illegitimate son is excluded from succession.
On the other hand, the Nagpur High Court in Bhagwantrao vs Punjaram (1) rightly came to the conclusion that where on a partition between a legitimate and an illegitimate son, the widow was allotted a share, on her death the illegitimate son was entitled to a share in the property.
We, therefore, hold that on the death of the widow, the illegitimate son, the father of the first respondent herein, succeeded to the other half share of the estate of his putative father Raja Ajit Singh.
It is.
next contended that the widows acquired an absolute interest in the estate of Raja.
Ajit Singh by adverse possession and, therefore, the property would devolve; not on Raja Ajit Singh 's heirs but on the heirs of the widows.
On the question of adverse possession also, both the courts below have held against the appellant.
But learned counsel argued that in the circumstances of this case the said find ing was a mixed question of fact and law.
It was said that the courts below missed the point that the Court of Wards, representing the widows, held the Estate adversely to Ramraghuraj Singh in respect of his half share and, therefore, the fact that during its management the widows did not deny the title of Ramraghuraj Singh or the fact that they admitted his title could not affect the question of adverse possession.
Assuming that learned counsel for the appellant was correct in his contention, we fail to see how the said legal position would advance the appellants case, for the Court of Wards admittedly managed only the (1) I.L.R. 357 widows ' limited estate and it is not the case of the appellant that the Court of Wards acquired on behalf of the widows an absolute interest in respect of the half share of Ramraghuraj Singh in the suit properties.
The plaintiffs themselves claimed to hereversioners of Raja Ajit Singh on the ground that the succession to him opened out when the widows died; and if their contention be accepted, namely, that the widows acquired an absolute interest in half of the property, they would be non suited in respect thereof on the simple ground that their suit was not to recover the property as the heirs of the widows.
But, as we have pointed out, the widows would have acquired a title by adverse possession in respect of the share of Ramraghuraj Singh only in their capacity as owners of a limited estate i.e., in regard to their half share they held it as widow 's estate and in respect of the other half share of Ramraghuraj Singh they acquired a right by adverse possession only a limited estate therein.
The result would be, when the widows died the succession to the estate of Raja Ajit Singh would open out and the illegitimate son, as the nearest heir, would succeed to the entire estate.
We, therefore, reject this contention.
In the result, the appeal fails and is dismissed.
The respondent will not get any costs as the Advocate for the respondent is absent in 'the Court when the judgment is being delivered.
Appeal dismissed. | A Sudra Hindu died leaving two widows and an illegitimate son by a continuously and exclusively kept concubine.
The son succeeded to a moiety of the estate and the widows succeeded to the other moiety.
The widows died without leaving any daughter or daughter 's son.
The reversioners filed a suit for recovery of possession of the estate.
The illegitimate son contended that on the death of his father he was entitled to succeed to half the estate the other going to the widows and that on the death of the widows he was entitled to the half share held by them.
Held, that the illegitimate son succeeded to half the estate upon the death of the father and succeeded to the other half on the death of the widows.
An illegitimate son has the status of a son under the Hindu Law; but he has no rights by birth and cannot claim partition during his father 's lifetime.
On the father 's death he takes his father 's self acquired property along with the legitimate son and in case the legitimate son dies, he takes the entire property by survivorship.
If there is no legitimate son, he would be entitled only to a half share when there is a widow, daughter ox daughter 's son of the last male holder.
In the absence of any one of these three heirs, he succeeds to the entire state.
If the widow succeeds to half the estate, upon her death succession again opens to half the estate of the last male 348 holder held by her and the illegitimate son, who has the status of a son, has a preferential claim over all other reversioners.
Raja jogendra Bhupati Hurri Chundun Mahapatra vs Nityarnund Mansingh, (1890) L.R. 17 I.A. 128, Kamulammal vs Visvanathaswami Naicker, (1922) L.R. 50 I.A. 32 and Vallaiyappa Chetty vs Natarajan, Mad. 1, referred to.
Karuppayee Ammal vs Ramaswami, Mad. 856, distinguished.
Bhagwantrao vs Punjaram, I.L.R. , approved. |
l Appeals No. 1005 of 1964.
Appeal by special leave from the judgment and order dated July 12, 1962 of the Bombay High Court, Nagpur Bench in appeal No. 16 of 1960 under the Letters Patent.
A. section Bobde, G. L. Sanghi, and O. C. Mathur, for the appellant.
N. C. Chatterjee and M. section Gupte, for respondents Nos. 1 and 2.
W. section Barlingay and A. G. Ratnaparkhi, for respondent No. 4.
The Judgment of the Court was delivered by Wanchoo, C.J.
This is an appeal by special leave from the judgment of the Bombay High Court and arises in the following circumstances.
The respondents were members of a Co operative Housing Society and had created a mortgage on their property in favour of the society.
As the amount due under the mortgage was not paid, the matter was referred to the Registrar, Co operative Societies, and he made an order dated May 1, 1957 that the respondents should pay a sum of Rs. 9,000 and odd and interest at Rs. 12 per cent per annum from August 1, 1953 till satisfaction of the debt due to the Society.
The Registrar further directed that if the amount was not paid in cash to the society, the property mentioned in his order would be sold in satisfaction of the amount.
The order also provided that in case the amount due was not realised from the sale of the property, 'the society would have the right to proceed against the respondents for the balance.
The amount was not paid as directed in the order.
Consequently an application was made to the civil court as provided by law for recovery of the amount under the order of the Registrar which amounted to a decree.
In consequence the property on which charge was created by the order of the Registrar was brought 'to 697 sale.
The sale was held on April 7, 1958 and the appellant being the highest bidder, the sale was concluded in his favour.
Normally the sale would have been confirmed after 30 days, if no application had been made under O. XXI r. 90 of the Code of Civil Procedure, for O. XXI r. 92 inter alia provides that "where no application is made under r. 89, r. 90 or r. 91, or where such application is made and disallowed, the court shall make an order confirming the sale and thereupon the sale shall become absolute".
As an application had been made on May 3, 1958 under O. XXI r. 90, the sale could not be confirmed till that application was disposed of.
Proceedings under O. XXI rule 90 seem to have gone on upto October 7, 1958.
On that day it appears that one of the respondents gave evidence as a witness.
Thereafter it was the turn of the Society decree holder to give evidence.
But before the evidence of the society began, it appears that respondents requested for one month 's time to deposit the decretal amount along with the auction purchaser 's commission.
They also appear to have stated that in that event they were prepared to withdraw their application under O. XXI r. 90.
The society as well as the auction purchaser had no objection to time being allowed.
The executing court therefore granted time to the respondents till November 21, 1958 to deposit the entire decretal amount along with the auction purchaser 's commission.
After time was thus allowed with consent of the parties, the application under O. XXI r. 90 was dismissed as withdrawn with no order as to costs.
On November 20, 1958, an application was made by he respondents in which they referred to what had been ordered on October 7, 1958.
They further stated that November 21, 1958 was a holiday and it was not possible to deposit the amount on that day though they were prepared to do so.
They consequently prayed for time for one day so that the deposit might be made on November 22, 1958.
No order was passed on this application on November 20, 1958 though it bears an endorsement of the executing court to the effect that it had been filed on November 20, 1958.
November 21, 1958 being a holiday it appears that the matter came before the executing court on November 22.
On that day the court noted that no amount had been deposited.
The order sheet also shows that counsel for the respondents prayed for time for a fortnight.
The society decree holder as well 'as the auction purchaser (appellant) opposed the prayer for extension of time.
The executing court held that as the society decree holder and the auction purchaser were not willing to extend time the court could not extend time which had been given under an agreement of the parties by way of compromise.
The court therefore rejected the prayer for extension of time and thereafter confirmed the sale as required by 0 XXI r. 92 as the application under O. XXI r. 90 had already been dismissed on October 7, 1958.
698 The respondents went in appeal to the District Judge.
He held that the court had always the power whether under section 148 of the Code of Civil Procedure or otherwise, to postpone passing of orders confirming sale of immovable properties.
He, went on to hold that the executing court erred in holding that it had no power to grant further extension of time.
The appeal was therefore allowed, the order of the executing court set aside and the case remitted to.
the executing court for deciding the application for extension of time on merits.
It may be mentioned that though the District Judge said in the order that the application presented on November 22, 1958 for granting further time would be disposed of after hearing parties and considering the merits of the case, there was in fact no written application on November 22, 1958 and there was only an oral prayer.
That however makes no difference to the main question before us.
There was then a second appeal 'by the appellant to the High Court.
A question was raised in the High Court whether O. XXXIV r. 5 applied to the present case.
The learned Single Judge seems to have held that O. XXXIV r. 5 did not apply.
He further held that in view.
of the provisions of O. XXI r. 92, the sale was rightly confirmed and section 148 of the Code of Civil Procedure could not under the circumstances be invoked.
The appeal therefore was allowed and the order of the executing court restored.
Then there was a Letters Patent Appeal by the respondents.
The Division Bench appears to have held that O. XXXIV r. 5 would apply in a case of this kind.
It also went on to say that even if O. XXXIV r. 5 did not apply, it was a fundamental principle that before a mortgagor could be prevented from making the payment and redeeming the property, his rights must have come to an end and they would come to an end only when his title was lost by confirmation of sale.
It went on to hold that if the application for extension of time was wrongly rejected if the mortgagor had the right and the court had 'the power to grant adjournment it would be open in appeal to consider whether the executing court refused the adjournment properly or not.
If in appeal the court came 'to the conclusion that the order of the executing court refusing extension of time was wrong, the confirmation which followed on such wrong order would fall and the mortgagor judgment debtor would be entitled to deposit the amount.
It appears that as the respondents had deposited some money after the order of the District Judge in appeal, the Letters Patent Bench allowed the appeal, set aside the order of the learned Single Judge and restored the order of the District Judge and further set aside the order of confirmation made by the executing court on November 22, 1958.
It also ordered that the amount lying in deposit should be paid to the decree holder mortgagee and the auction purchaser.
It may be added that this deposit was not made before the confirmation 69 9 of sale on November 22, 1958 but long afterwards in 1959.
It further directed that if on making up the accounts, it was found that any additional amount had to be deposited, the court would give reasonable time to the judgment debtors, namely, the present respondents before us.
The High Court having refused leave to appeal, the appellant obtained special leave from this Court, and that is how the matter has come before us.
The principal question that arises for decision in this case is whether the executing court was right in the view that it could not extend time which had been given by consent of parties on October7, 1958.
If that view is correct, there would be no difficulty in holding, in view of O. XXI r. 92, that the order confirming sale was proper.
We shall proceed on that assumption that O. XXXIV c. 5 applies in the present case and that the order of the Registrar which was under execution was a final decree in a mortgage suit.
O. XXXIV r. 5(1) gives an opportunity to the judgment ' debtor in a mortgage decree for sale to deposit the amount due under the mortgage decree at any time before the confirmation of sale made in pursuance of the final decree, and if such a deposit is made the court executing the decree has to accept the payment and make an order in favour of the judgment debtor in terms of ' O. XXXIV r. 5 (1).
Though O. XXXIV r. 5 (1) recognises the right of the judgment debtor to pay the decretal amount in an execution relating to a mortgage decree for sale at any time before, the confirmation of sale, that in our opinion does not mean that be said rule gives power to the court to extend time for payment on an application made by the judgment ;debtor.
There is no pro vision in O. XXXIV r. 5 (1) like that contained in O. XXXIV r. 4 (2) to extend time for payment after the final decree is passed in a mortgage suit.
As we read O. XXXIV r. 5 it only permits he judgment debtor to deposit the amount due.
under the decree and such other amount as may be due in consequence of a sale having taken place, provided the deposit is made before the confirmation of sale.
But there is no power in O. XXXIV r. 5 (1) to grant extension of time and postpone confirmation of sale there:or.
The observation of the District Judge that the court has always the power to postpone passing orders confirming sale of immovable property is in our view incorrect, in the face of the provisions contained in O. XXI r. 92 (1).
That provision makes it absolutely clear that if no application is made under r. 89, r. 90 or r. 91 or where such application is made and disallowed, the court has to make an order confirming the sale and thereupon the ,ale becomes absolute.
It is not open to the court to go on fixing late after date and postponing confirmation of sale merely to accommodate a judgment debtor.
If that were so, the court may go on postponing confirmation of sale for years in order to accommodate a judgment debtor.
What O. XXI r. 92 contemplates is that where conditions thereunder are satisfied an order for confirmation 700 must follow. ' Further we have already indicated that O. XXXIV r. 5 does not give any power to court to rant time to deposit the money after the final decree has been passed.
All that it permits is that a judgment debtor can deposit the amount even after the final decree is passed at any time before the confirmation of sale and if he does so, an order in terms of O. XXXIV r. 5 (1) in his favour has to be passed.
With respect we cannot understand what the Letters Patent Bench meant by saying that before a mortgagor could be prevented from making payment and redeeming the property, his rights must have come to an end and that they could not come to an end unless his title to the property had been lost by confirmation of sale.
It is true that so long as his right to redeem subsists the mortgagor may redeem the property.
It is this principle which is recognised in O. XXXIV r. 5 which provides that the mortgagor judgment debtor can deposit the amount due even after the final decree has been passed but this deposit must be made at any time before confirmation of sale.
It may be noted that there is no power under O. XXXIV r. 5 to extend time and all that it does is to permit the mortgagor judgment debtor to deposit the amount before confirmation of sale.
It does not give any right to the mortgagor judgment debtor to ask for postponement of confirmation of sale in order to enable him to deposit the amount.
We have to interpret O. XXXIV r. 5 and O. XXI r. 92 harmoniously and on a harmonious interpretation of the two provisions it is clear that though the mortgagor has the right to deposit the. amount due at any time before confirmation of sale, there is no question of his being granted time under O. XXXIV r. 5 and if the provisions of O. XXI r. 92 (1) apply the sale must be confirmed unless before the confirmation the mortgagor judg ment debtor has deposited the amount as permitted by O. XXXIV r. 5.
We may in this connection refer to the decision of this Court in Janak Rai vs Gurdial Singh(1), where it has been laid down that once the conditions of O. XXI r. 92 (1) are complied with, the executing court must confirm the sale.
It is on these principles that we have to decide whether the trial court was correct.
We have already indicated that the sale was held on April 7, 1958, and in the normal course it would have been confirmed after 30 days unless an application under r. 89, r. 90, or r. 91 of O. XXI was made.
Besides, this case is, as we have already assumed, analogous to the case of a final mortgage decree.
The judgment debtor mortgagor had the right to deposit 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 O. XXXIV r. 5 (1 ) 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 (1) ; 70 1 O. XXXIV r. 5 (1) in their favour.
In this case an application under O. XXI r. 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 O. XXI r. 90.
O Chat 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 21, 1958.
Obviously the basis of the compromise was that the respondents withdrew their application under O. XXI r. 90 while the decree holder society and the auction purchaser appellant agreed that time might be given to deposit the amount up to November 21, 1958.
If this agreement had 'not been arrived at and if the application under O. XXI r. 90 bad been dismissed (for example, on merits) on October 7, 1958, the court was bound under O. XXI r. 92(1) to confirm the sale at once.
But because of the compromise between the parties by which the respondents were given time up to 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 O. XXI r. 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.
Now let us see what happened about November 21, 1958.
On November 20, 1958, an application was made by the respondents praying that they might be given one day more as November 21, 1958 was a holiday.
No order was passed on that date, but it is remarkable that no money was deposited on November 20, 1958.
When the matter came up before the court on November 22, 1958 no money was deposited even on that day.
Now under O. XXXIV r. 5 it was open to the respondents to deposit the entire amount on November 22, 1958 before the sale was confirmed, but no such deposit was made on November 22, 1958.
On the other hand, counsel for the respondents prayed to the executing court for extension of time by 14 days.
The executing court refused that holding that time upto November 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 O. XXI r. 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 O. XXI r. 92 required that as the application under O. XXI r. 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 Civil Procedure would not apply 702 in these circumstances, and the executing court was right in holding that it could not extend time.
Thereafter it rightly the sale as required under O. XXI r. 92, there being no question of the application of O. XXXIV r. 5, for the money had not been deposited on November 22, 1958 before the order of confirmation confirmed was passed.
In 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.
it is however urged that it does not appear that the time was , ranted on October 7, 1958 by consent of parties because the respondents had only asked for one month 's time and the court gave time for about six weeks.
It appears however that the grant of 'time on October 7, 1958 was as a result of an oral compromise between the parties.
This is quite, clear from the fact that the application under O. XXI r. 90 was withdrawn on the basis that time would be granted.
The fact that time was actually granted for six weeks does not mean that that was done without the consent of the parties.
It seems to us that the whole thing took place in the presence of the court and the order granting time upto November 21, 1958 must in the circumstances be read as a consent order.
It is borne out by the fact that on November 22, 1958 the same presiding judge of the executing court said that time had been granted with the consent of the parties by way of compromise.
We cannot therefore accept the contention that time was not granted by consent of parties and therefore the court had power under section 148 to extend time which had already been granted.
We, allow the appeal, set aside the order of the Letters Patent Bench and of the District Judge and restore that of the executing court dated November 22, 1958.
It follows that the sale stood confirmed in favour of the appellant on November 22, 1958.
We direct that the respondents (judgment debtors) will pay the costs of the appellant throughout.
The money deposited by the respondent can be taken back by them.
R.K.P.S. Appeal allowed.
L7 Sup/67 17 5 68 2,500 GIPF. | The respondents were members of a Cooperative housing society and 'had created a mortgage on their property in favour of the society.
As an amount due under the mortgage was not paid, the matter was referred to the Registrar of Cooperative Societies and he made an order on May 1, 1957 directing the respondent to pay the amount due from August f. 1953 till the debt was discharged.
He further directed that if the amount was not paid, the property could be sold in satisfaction of the amount.
The amount was not paid as directed and the property was therefore sold on April 7, 1958 to the appellant.
As an application was made by the respondents on May 3, 1958 under O. XXI, r. 90 the sale could not be confirmed under O. XXI, r. 92 until this application was disposed of.
The proceedings on the application continued up to October 7, 1958 when an order was passed with the consent of the parties whereby the respondents were granted time till November 21, 1958 to deposit the amount due and the application under O. XXI r. 90 was dismissed as withdrawn.
When the matter came up before the executing court on November 22, the court noted that no amount bad been deposited and although an application was made on behalf of the respondents for a further extension of time, the executing court held that as the society decree holder and the auction purchaser were not willing to extend time, the court could not extend time which had been given under an agreement of the parties by way of compromise.
The court therefore confirmed the sale under O. XXI r. 92.
After appeals to the District Judge and a single bench of the High Court, a Division Bench, in a Letters Patent Appeal, held that O. XXXIV r. 5 would apply in a case of 'this kind and that even if it did not apply.
it was a fundamental principle that before a mortgagor could be pre vented from making the payment and redeeming 'the property.
his rights must have come to an end and they would come to an end only when his title was lost by confirmation of sale.
The court allowed the appeal holding that the application for extension of time was wrongly rejected by the executing court as it had the power to grant an extension.
It further directed that as some amount had been paid by he respon dents, if on making up the accounts it was found that any additional amount was due the court would give reasonable time for this to be deposited.
On appeal to this Court, HELD : The order of the executing court refusing extension of time and confirming the sale in favour of the appellant under O. XXI r. 92 was correct.
[702B] 696 It was not open to the executing court to extend time without the 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.
[701H] Though O. XXXIV r. 5(1) recognises the right of the judgment debtor to pay the decretal amount in an execution relating to a mortage decree for sale at any time before the confirmation of sale, the rule does not give any power to the court to grant time to deposit the money after the final decree has been passed.
It is not open to the court to go on fixing date after date and postponing confirmation of sale merely to accommodate a judgment debtor.
A harmonious construction of O. XXXIV r. 5 and O. XXI r. 92 makes it clear that if the provisions of O. XXI r. 92(1) apply the sale must be confirmed unless before the confirmation the mortgagor judgment debtor has deposited the amount as permitted by O. XXXIV r. 5.
[699D E. H; 700E] Janak Rai vs Gurdial Singh ; , referred to. |
Appeal Nos.
474 477 966.
Appeals by special leave from the judgment and order dated September 5, 1963 of the Gujarat High Court in Income tax Reference No. 19 of 1962.
S.T. Desai, A. N. Kirpal, R.N. Sachthey and S.P. Nayyar for the appellant (in all the appeals).
R.J. Kolah, M.L. Bhakta and O.C. Mathur, for the respondents (in all the appeals).
The Judgment of the Court was delivered by Sikri, J.
These four appeals by special leave are ' directed against the judgment of the Gujarat High Court in Income Tax Reference No. 19 of 1962, whereby the High Court answered the questions referred to it by the Income tax Appellate Tribunal against the Commissioner of Income tax, who is the appellant before us.
The reference was in respect of assessment years 1955 56 and 1956 57 in the case of Shri Jayantilal Amratlai (Individual) and in respect of assessments years 1958 59 and 1959 60 in the case of Jayantilal Amratlal Charitable Trust Ahamedabad.
The questions referred are: (1 ) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the income of Jayantilal Amratlal Charitable Trust was not assessable in the hands of the settlor Jayantilal Amratlal under the first proviso to Sec.
16(1)(c) of the Income tax Act for the assessment years 1955 56 and 1956 57 ? (2) Whether on 1he facts and in the circumstances of the case, the Tribunal was right in holding that the income of the Trust should be considered in the assessment of the trustees and that they were entitled to the benefits of the refunds attached to the dividends from the Trust properties for 'the assessment years 1958 59 and 1959 60 ? The answer to these quest.ions depends on the true interpretation of section 16(1)(c) of the Indian Income tax Act, 1922, and the interpretation of the Trust Deed dated June 19, 1947, and 948 to appreciate the points fully it is necessary to give a few facts which are stated in the statement of the case.
Jayantilal Amratlal, individual, hereinafter referred to as the settlor, executed a trust deed whereby he settled 80 ordinary shares of M/s Jayantilal Amratlal Ltd., on trust and created a trust known as "Jayantilal Amratlal Charitable Trust" to carry out the following various objects set out in the Trust Deed : "For the relief of poor, for education, for medical relief, for advancement of religion, knowledge, commerce, health, safety or any other objects beneficial to mankind." This Trust Deed was registered with the Charity Commissioner under the Bombay Public Trust Act, 1950.
The Department accepted this trust as a valid charitable trust and gave the necessary relief to the trustees in respect of the income of the Trust.
till the assessment year 1957 58.
The Income tax Officer, while dealing with the assessment of Jayantilal Amratlal Charitable Trust for the year 1958 59, wrote A letter to the Trust to show cause why the income of the Trust should not be included in that of the settlor and why the case of the Trust should not be decided accordingly.
The Managing Trustee submitted his reply.
The Income tax Officer wrote lengthy order holding that on the facts the case was covered by the first proviso to section 16 ( 1 ) (c).
He was impressed both by the wide powers given to the settlor and the way in which the settlor had been utilising his powers under the various clauses of the Trust Deed.
He held : "It is not necessary that there should be diversion of income or assets from char table purposes to noncharitable purposes to constitute "retransfer of assets to or re assumption of power over" the income or assets of the settlor.
It is not even necessary for the purpose of 1st proviso to section 16(1)(c), especially its later part i.e. "give the settlor a right to reassume power directly or indirectly over the income or assets" that income or assets should be used for personal ends.
For diversion of such assets or income from one charitable purpose to another in accordance with the wishes of the settlor and the utilisation of income and investment of income or assets not in full conformity with the desires of the trustees would be enough to drag the Trust property in the ambit of section 16 (I) (c).
In the instant case, the settlor is all in all, he is the managing trustee and in the event of a conflict of opinion amongst the trustees the settlor would exercise predominating 949 influence both as managing trustee as also in his capacity of an arbitrator and his decision would be binding on all.
The most important point which needs consideration is that all the inherent powers and discretion for the income and corpus of the Trust property remain with The settlor, in his capacity as settlor and not by way of his capacity of a trustee.
" The Income tax Officer accordingly held that the income of the Trust would not be computed in the hands of the trustees but would be computed in the hands of the settlor under section 16(1) (c).
For the assessment year 1959 60 he passed a similar order on the same date.
On the same day he also dealt with the assessments of Jayantilal Amratlal, individual, for the years 1955 56 and 1956 57.
Following his reasoning he included the relevant income of the Trust in the hands of Jayantilal Amratlal.
Four appeals were taken to the Appellate Assistant Commis sioner who, by his two orders dated November 8, 1960, dismissed the appeals.
Before him the settlor relied on section 35 of the Bombay Public Trust Act, 1950, but the Appellate Assistant Commissioner held that this did not assist the settlor because the Income tax law did take into consideration income derived directly or indirectly by illegal means.
He felt that the settlor "could not be precluded from utilising funds of the trust directly or indirectly to his benefit since he had a right under the settlement to do so and the Bombay Public Trust Act did not hold any fear for him as the penalties leviable were not of a deterrent nature, compared to the advantages that he could gain directly or indirectly by re assuming control over the investments or its income".
On appeal, Income tax Appellate Tribunal, however, reversed these orders and held that the income from the Trust was not hit by the first proviso to section 16(1)(c).
The Tribunal ignored the factual position relied on by the Income tax Officer and the Appellate Assistant Commissioner and confined itself only to the Trust Deed.
Regarding the offending clauses 4, 10 and 21 of the Trust Deed, which we will presently refer to, the Appellate Tribunal held: "We see nothing in these clauses which confer on the assessee the right to retransfer to the assessee directly or indirectly the income or the assets or to reassume power over them.
He has always to exercise these powers within the framework of the Trust.
There is no doubt power in clause (10) to invest in any manner and thereby in the assessee 's own companies, but this is overridden by clause 35 of the Bombay Trust 9 5 0 Act under which it is registered.
If the Charity Commissioner has chosen not to take action, it may also be that he has considered the matter and approved the action.
It is purely his responsibility.
The. fact that the investment itself has not been made illegal under the Trust Act and that the assessee can offend the provisions with impunity as the penalty is light are all matters extraneous to this consideration which has to be confined only to the provisions in the deed.
" At the instance of the Commissioner of Income tax the Appellate Tribunal stated the case and referred the questions which we have already reproduced above.
The High Court held : "When a statute talks about a right to reassume, it must mean a lawful right which can be lawfully exercised.
a right to reassume must be given to the settlor independently of any third party and dependent upon his own volition.
It is true that the Charity Commissioner may grant leave to the settlor, but he may or may not grant it.
A right to reassume cannot rest dependent upon whether the Charity Commissioner may or may not grant sanction.
" Shelat, C.J., observed "Surely, it must be presumed that the Charity Commissioner would not grant his sanction to an investment which is bound to result in a conflict of duty and interest on the part of the settlor who is also a trustee.
Therefore, such a right, if it can be called a right, is not one of any substance and cannot, therefore, be construed as a right to reassume power over the trust assets or the income thereof, as contemplated by proviso I to section 16(1)(c)." "A loan, by the very nature of it, cannot be said to amount to an exercise of dominion or control over its subject matter.
It is repayable and is given on conditions as to the time of repayment and interest, if any.
By taking a loan a settlor does not exercise over its subject matter power.or dominion which, but for the trust or the settlement, he would have been able to exercise." Section 16(1) (c) reads as follows "16.
Exemptions and exclusions in determining the total income. .
(1) In Computing the total income of an assessee.
(a) . 951 (b). (c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor : Provided that for the purposes of this clause a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or indirectly of the income or assets to the settlor, disponer or transferor, or in any way gives the settlor, disponer or transferor a right to reassume power directly or indirectly over the income or assets; Provided further that the expression "settlement or disposition" shall for the purposes of this clause include any disposition, trust, covenant, agreement, or arrangement, and the expression "settlor or dispone r" in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made : Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the life time of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said income as and when the power to revoke arises to him." The learned counsel for the appellant, Mr. section T. Desai, has submitted three propositions before us (1) The operation of the first proviso to section 16(1) (c) depends only on the settlement and its terms and not on any provision of the Bombay Public Trusts Act, which may or may not be observed; (2) The absolute powers reserved over the income and corpus of the trust property remain vested in the settlor in his capacity as the settlor and not as trustee, and further they fall within the purview of the first pro.
viso to section 16(l.) (c); and (3) It is a relevant consideration that, as found by the authorities, the settlor has been deriving direct and indirect benefits from the trust properties.
He relies on clauses 4, 6, 8, 10, 11 and 21 of the Trust Deed to show that the Trust Deed gives the settlor right to re assume power directly 9 Sup.
CI/67 17 952 or indirectly over the income or assets of the Trust within the first proviso to section 16(1)(c).
Let us now examine the Trust Deed.
This indenture was made between Jayantilal Amratlal, hereinafter called the settlor, and Jayantilal Amratlal, Padmavati wife of the said Jayantilal Amratlal, Ramanlal Amratlal, Hariprasad Amratlal, Kasturlal Chandulal Parikh and Bhagubhai Chandulal, hereinafter called the Trustees.
Clause, 1 vests the shares and the other trust properties and income in the trustees.
Clause 2 gives the name of the trust Clause 3 obliges the trustees to get and collect income ,of the trust properties and pay expenses, etc.
Clause 4 creates the trust for the relief of poor, and for education, medical relief, etc.
It further provides : "The Trustees shall at the direction of the Settlor during, his lifetime and after his death at their discretion set aside any portion of the income of the Trust Premises to provide cash, food and clothes for any temple or temples of the Pushti Marg Sampradaya.
In applying.
the income of the Trust Premises for all or any of the objects hereinbefore specified the Trustees may consider the claims of any needy or poor person belonging to the Visa Porwad Community.
" Clause 5 enables the settlor to give direction to the trustees to accept contributions ,or donations to the Trust from other persons.
Clause 6 provides as follows : "The Setflor may at any time or times by writing direct that any specific funds or investments or property forming part of the Trust Premises and/or the income thereof shall be utilised and applied exclusively for any one more of the aforesaid ,charitable objects and the Settlor may by writing at any time or times vary or revoke any such directions previously given by him and Trustees shall be bound to carry into effect all such directions given by the Settlor.
" Clause 7 enables the Trustees to utilise the whole or any portion of the Trust Premises for all or any of the charitable object ,,, if the Settlor so directs.
Clause 8 may be set out in full : "8.
The Trustees shall from time to time at the direction of the settlor during his life time and after his death may at any time at their discretion deliver or hand over the income of the Trust Premises or any part of such income to any institution, association or society to be applied for all or any of the purposes of these presents without being bound to see to the application thereof or being liable for the loss or misapplication thereof.
" Clause 9 enables the Trustees to invest the residue, etc., and to accumulate the same and apply towards the objects of the Trust.
Clause 10 inter alia empowers the Settlor to give directions regardin the investment of moneys "as are authorised by law for invest 953 ment of trust premises or in ordinary or preference shares of joint stock companies, whether partly or fully paid, or in debentures or in giving loans to any public company or firm of good standing and reputation or in the purchase or mortgage of any movable or immovable property with power to the Trustees with the like direction to vary or transpose the said investments into or for others of the same or of a like nature.
" Clause II inter alia enables the Settlor to direct the Trustees to vary the investments.
Out of the other clauses we need only mention clause 21 which reads as follows : "All questions arising in the management and administration of the trusts or powers hereof and all differences of opinion amongst the Trustees shall be disposed of in accordance with the opinion of the Settlor during his lifetime and on and after the death of the settlor in accordance with the opinion of the majority of the Trustees in the case of their being equally divided the trustee senior most in age shall have a casting vote.
" The learned counsel for the appellant says that these clauses read fairly would enable the Settlor to direct the Trustees to give a loan to him and he could give directions to the Trustees in 'such a way as to re assume control over the assets.
He says that as a matter of fact the Income tax Officer did find that the Settlor has been utilising these powers for his own benefit.
There is no doubt that under the Trust Deed the Settlor has very wide powers and the Settlor could direct the Trustees to grant loan to him.
The Trustees could even grant loan to a firm in which be was interested.
But this would be contrary to the provisions of the Bombay Public Trust Act.
Section 35 (I) of the Bombay Public Trust Act provides : "35(1) : Investment of Public Trust Money Where the trust property consists of money and cannot be applied immediately or at an early date for the purposes of the public trusts the trustee shall be bound (notwithstanding any direction contained in the Instrument of the Trust) to deposit the money in any scheduled bank as defined in the , in the Postal Savings Bank or in a Cooperative Bank approved by the State Government for the purpose or to invest it in Public security; Provided.
Provided further that the Charity Commissioner may by general or special order permit the Trustee of any public trust or classes of such trusts to invest the money in any other manner.
" 9 54 Mr. section T. Desai submits that we cannot take into consideration the provisions of the Bombay Public Trust Act.
We are unable to accept this submission.
The Bombay Public Trust Act must, to the extent it operates, override any provisions in the Trust Deed.
As Shelat, J., observed, "when proviso 1 talks about a right to reassume power, prima facie, that must mean that there, is such power lawfully given under the deed of trust.
" It seems to us that the Legislature, in proviso I to section 16(1)(c) is thinking of powers lawfully given and powers lawfully exercised.
Any person can commit breach of trust and assume power over the income or assets but for that reason the income of the trust cannot be treated as the Income of the settlor under the proviso.
The Calcutta High Court in Commissioner of Income tax, West Bengal vs Sir section M. Bose(1) observed "The first proviso to Section 16(1)(c) only contemplates cases where the settlor can lawfully reassume power over the income or the assets.
Unless that was so, the proviso would cover every trust where a settlor has made himself trustee because a trustee acting dis honestly could always assume control over the income.
" We agree with these observations.
Similarly, in an unreported judgment (Commissioner of Income tax, Bombay North vs Mathuradas Mangaldas Parekh ( 2 ) the Bombay High Court repelled a similar argument by observing : "The first answer to this contention is that them trustees would be committing a breach of the law if they were to advance moneys to themselves.
There is a clear prohibition under Section 54 of the Trusts Act.
" If we do not ignore the provisions of the Bombay Public Trust Act and the general principles applicable to public trusts, the question arises whether on a true interpretation of the first proviso to section 16 ( 1 ) (c) the powers reserved to the settlor under the Trust Deed come within its mischief.
The learned counsel says that the words of the proviso are very wide.
I He points out the reasons why Parliament has inserted this proviso.
He draws our atten tion to the following observations of Lord Macmillan in Chamberlain vs Inland Revenue Commissioners(1), quoted in.
Tulsidas Kilachand vs Commissioner of Income tax(1) (1) at p. 141.
(2) I.T. Ref.
No. 4 of 1954, judgment dated August 26, 1954, reported in "unreported Income tax Judgmenis of the Bombay High Court, Book One, Published by Western India Regional Council of the Institute of Chartered Accountants of India, Bombay" p. 314 at p. 316.
(3) 329.
(4) , 4. 955 .lm15 "This legislation. (is) designed to overtake and circumvent a growing tendency on the part of taxpayers to endeavour to avoid or reduce tax liability.
by means of settlements.
Stated quite generally, the method consisted in the disposal by the taxpayer of part of his property in such a way that the income should no longer be receivable by him, while at the same time he retained certain powers over, or interests in, the property or its income.
The Legislature 's counter was to declare that the income of which the taxpayer had thus sought to disembarrass himself should, notwithstanding, be treated as still his income and taxed in his hands accordingly.
" This Court held in that case, that these observations applied also to the section under consideration, and the Indian provision is enacted with the, same intent and for the same purpose.
But even so, Lord Simonds observed while construing a similar provision in Wolfson vs Commissioners of Inland Revenue(1) : "It was urged that the construction that I favour leaves an easy loophole through which the evasive taxpayer may find escape.
That may be so; but I will repeat what has been said before.
It is not the function of a court of law to give to words a strained and unnatural meaning because only thus will a taxing section apply to a transaction which, had the Legislature thought, of it, would have been covered by appropriate words." Viscount Simonds observed again in Saunders vs Commissioners of Inland Revenue(1) in construing a similar provision occurring in the English Act : "I am assuredly not going to depart from the fair meaning of words in a taxing Section in order that tax may be exacted.
" What then is the fair meaning of section 16(1)(c) proviso.1 ? It seems to us that the words "reassume power ' give indication to the correct meaning of the proviso.
The latter part of the proviso contemplated that the settlor should be able by virtue of something contained in the Trust Deed, to take back the power he had over the assets or income previous to the execution of the Trust Deed.
A provision enabling the settlor to give directions to trustees to employ the assets or funds of the trust in a particular manner or for a particular charitable object contemplated by the trust cannot be said to confer a right to reassume power within the first proviso.
Otherwise a settlor could never name himself a sole trustee.
It seems to us that the latter part of the proviso contemplates a provision which would enable the settlor (1) , 169.
(2) ,431, 956 to take the income or assets outside the provisions of the Trust Deed.
Mr. Desai says that if a settlor can derive some direct or indirect benefit under a trust deed the trust would fall within first proviso.
But the first proviso does not use these words.
The words "direct or indirect benefit" occur only in the third proviso.
This Court held in Commissioner of Income tax, Punjab vs section Raghbir Singh(1) that although the settlor in that case obtained a benefit from the trust payment of his debts the first proviso was not attracted.
Coming to the various clauses of the Trust Deed there is no doubt that the settlor has retained power to see that his wishes are carried out while he is alive.
But he can only direct the carrying out of his wishes within the terms of the Trust Deed.
What he can direct under clause 4 is the application of income to a particular charitable purpose.
Similarly under clause 6 he can nominate the charitable object and the fund or investment which should be utilised for that object.
This is in no sense a power to reassume control.
Clause 8 enables the settlor to delegate the carrying out of a particular charitable object.
For instance, he could direct some contributions to be made to a hospital or a school without obliging the trustees to see that the hospital or the school does not misapply the funds.
Clauses 10 and It which enable the settlor to give directions regarding the investment must be read subject to the provisions of the Bombay Public Trust Act and the general principles of law relating to trusts.
We have already said that he could not legally direct a loan to be made to himself.
Further it is difficult to subscribe to the,, proposition that a loan to a company in which the settlor is interested would give power to the settlor over the assets within the meaning of the first proviso.
Clause 21 only shows the wide powers which the settlor has reserved to himself.
None of these clauses comes within the purview of Proviso 1.
In the result we agree with the conclusions of the High Court.
The appeals accordingly fail and are dismissed with costs.
One hearing fee.
G.C. Appleas dismissed. | J executed a trust deed whereby he created a charitable trust.
The 4iced was registered with the Charity Commissioner under the Bombay Public Trust Act, 1950.
For the year 1958 59 the Income tax Officer held that since the settlor had reserved to himself wide powers for own benefit and had also utilised those powers to his benefit, the case was coveted by section 16(1)(c) of the Income tax Act, 1922.
Accordingly the Income tax Officer taxed the income of the trust in the hands of the 'settlor.
A similar order was passed for the year 1959 60.
In his appeal before the Appellate Assistant Commissioner the settlor relied on section 35 of the Bombay Public Trusts Act, 1950 to .show that he was thereby precluded from utilising the funds for his own benefit but his plea was not accepted.
The Appellate Tribunal, however, relying on the terms .of the deed itself decided in favour of the settlor and.
the High Court in reference did the same.
The revenue appealed.
HELD: (i) There was no doubt ' that under the Trust Deed the settlor had very wide powers and could direct ' the Trustees to.
grant loan him.
The Trustees could even grant a loan to a firm in which he was interested.
But this would be contrary to the provisions of section 35 the Bombay Trust Act.
The said Act to the extent it operates must override provisions in the Trust Deed.
[953E 954A B] The Legislature in proviso 1 to section 16(1)(c) is thinking of powers lawfully given and powers lawfully exercised.
Any person can commit breach of trust and assume power over income or assets but for that reason the income of the trust cannot be treated as the income of the settlor under the proviso.
Commissioner of Income tax, West Bengal vs Sir S.M. Bose, 21 ].T.R. 135 and Commissioner of Income tax, Bombay North vs Mathuradas Mangaldas Parekh, I.T. Ref.
No. 4/54, Judgment by Bombay High Court dated August 26, 1954, referred to.
(ii) The words 're assume power ' give indication to the correct meaning of section 16(1)(c) proviso 1.
The latter part of the proviso contemplates that the settlor should be able by virtue of something contained in the Trust Deed, to take back the power he had over the assets or income previous to the execution of the Trust Deed.
A provision enabling the settlor to give directions to.
trustees to employ the assets or funds of the trust in a particular manner or for a particular charitable object contemplated by the trust cannot be said to confer a right to re assume power within the first proviso.
Otherwise a settlor could never name himself a sole trustee.
The mere fact that the settlor can derive some direct or indirect benefit under a trust deed would not ' bring the deed within the first proviso.
[955G H; 966A B] 947 Chamberlain vs Inland Revenue Commissioner , Tulsidar Kalichand vs Commissioner of Income tax, 42 I.T.R. 1, WoIfson vs Commissoners Inland Reventte, , Saunders vs Commissioners Inland Revenue, , referred to.
Commissioner of Income tax, Punjab vs
section Raghbir Singh, 57/.T.R., followed.
On an examination of terms of the Trust Deed the Court held none of its clauses came within the purview of Proviso 1.
[956C F] |
il Appeals Nos.
83 85 of .1965.
Appeals by special leave from the judgment and decree dated February 9, 1962 of the Andhra Pradesh: High Court in Tr.
Appeal No. 558 of 1957 and A. section Nos. 89 and 157 of 1957 respectively.
P. Ram Reddy, A. V. V. Nair, B. Parthasarathy, and 0.
C. Mathur, for the appellant (in all the appeals).
C. R. Pattabhiraman and R. Ganapathy Iyer, for the respon dents (in C.As.
Nos. 83 and 84 of 1965) and respondents Nos. 15 (in C.A. No. 85 of 1965).
The Judgment of the Court was delivered by Bachawat, J.
One Venkatacharyulu was the Karta of a joint family consisting of himself and his four sons.
The appellant was his concubine since 1945 until his death on February 22, 1949.
By two registered deeds purporting to be sale deeds dated April 15, 1946, (Exbts.
A 1 and A 2), he transferred to the appellant certain properties belonging to the joint family.
In 1947 after the execution of exhibit A 1 and A 2 there was a disruption of the joint family and a severance of the joint status between Venkatacharyulu and his sons.
In 1954 his widow and sons instituted O.S. No. 12 of 1954 against the appellant for recovery of possession of the properties alleging that the documents dated April 15, 1946, were executed without consideration or for immoral purposes, and were void.
The appellant instituted against his widow and sons O.S. No. 63 of 1954, asking for general partition of the joint family properties and for allotment to her of the properties conveyed by the two deeds.
She also instituted O.S. No. 62 of 1954 against one of his sons and another person asking for damages and mesne profits for wrongful trespass on the properties.
The trial court dis missed O.S. No. 12 of 1954 and O.S. No. 62 of 1954 and decreed O.S. No. 63 of 1954.
From these decrees appeals were preferred in the High Court of Andhra Pradesh.
The High Court confirmed the decree in O.S. No. 62/54, allowed the two other appeals, dismissed O.S. No. 63/54 and decreed O.S. No. 12/54, the decree for possession in respect of the properties covered by exhibit A 1 being conditional on payment by the respondents of the value of improvements made by the appellant to the properties.
From the decrees passed by the High Court, the present appeals have been filed by special leave.
The High Court found that the transfers under exhibit A 1 and exhibit A 2 were not supported by any consideration by way of cash or delivery of jewels.
This finding is not challenged before us.
The High Court held that the transfers were made by Venkatacharyulu in favour of the appellant in view of past illicit cohabitation 45 with her, such past cohabitation was the motive and not the consideration for the transfers and the two deeds though ostensibly sale deeds, were in reality gift deeds.
It held that Venkatacharyulu had no power to make a gift of the joint family properties, the two deeds were invalid and the subsequent severance of joint status in 1947 could not validate them.
In this Court, it is common case that future illicit cohabitation was not the object or the consideration for the transfers under exhibit A 1 and exhibit A 2.
The appellant contends that Venkatacharyulu agreed to make the transfers in consideration of past cohabitation, having regard to section 2(d) of the , her past service was a valuable consideration and Venkatacharyulu was competent to alienate for value his undivided interest in the coparcenary properties.
The respondents contend that the transfers were by way of gifts and not in consideration of the past cohabitation, and Venkatacbaryulu was not competent to make a gift of the coparcenary properties.
In the alternative, the respondents contend that assuming that the transfers were made in consideration of past cohabitation, they were hit by Sec. 6(h) of the .
Our findings are as follows: Venkatacharyulu and the appellant were parties to an illicit intercourse.
The two agreed to cohabit.
Pursuant to the agreement each rendered services to the other.
Her services were given in exchange for his promise under which she obtained similar services.
In lieu of her services, he promised to give his services only and not his properties.
Having once operated as the consideration for his earlier promise, her past services could not be treated under section 2(d) of the as a subsisting consideration for his subsequent promise to transfer the properties to her.
The past cohabitation was the motive and not the consideration for the transfers under exhibit A 1 and A 2.
The transfers were without consideration and were by way of gifts.
The gifts were not hit by sec.
6(h) of the , by reason of the fact that they were motivated by a desire to compensate the concubine for her past services.
In Balo vs Parbati(1) the Court held that the assignment of mortgagee 's rights to a woman in consideration of past cohabitation was not hit by sec.
6(h) of the and, was valid.
Properly speaking, the past cohabitation was the motive and not the consideration for the assignment.
The assignment was without consideration by way of gift and as such was not bit by section 6(h).
(1) I.L.R. [1940] All.
370. 46 In Istak Kamu Musalman vs Ranchhod Zipru Bhate(1) the court rightly held that past cohabitation was the motive for the gift under Exhibit 186, and the gift was valid but in holding that the promises to make the gifts under other exhibits were made in consideration of past illicit cohabitation and consequently those gifts were invalid, the Court seems to have too readily assumed that past cohabitation was the consideration for the subsequent promises.
Venkatacharyulu was free to make a gift of his own property to his concubine.
The gifts,, under Exs.
Al 'and A 2 were not hit ' by section 6(h) of the .
But the properties gifted under exhibit A 1 and A 2 were coparcenary properties.
Under the Madras school of Mitakshara law by which Venkatacharyulu was governed, he had no power to make a gift of even his undivided interest in the coparcenary properties to his concubine.
The gifts were therefore invalid.
The invalid gifts were not validated by the disruption of the joint family in 1947.
After the disruption of the joint family, Venkatacharyulu was free to make a gift of his divided interest in the coparcenary properties to the appellant, but he did not make any such gift.
The transfers under Exs.
A 1 and A 2 were and are invalid.
We find no ground for interfering with the decrees passed by the High Court.
In the result, the appeals are dismissed.
There will be one set of costs and one hearing fee.
Y. P. Appeals dismissed.
(1) I.L.R. , 217. | V the karta of a joint Hindu family, transferred in 1946 certain properties, of the joint family to the appellant, who was his concubines since 1945.
The joint family disrupted in 1947, and after V 's death, the respondents his widow and sons, filed a suit against the appellant for recovery of possession of the properties alleging that the documents were executed without consideration or for immoral purposes.
and were void.
The appellant instituted suits for partition of the joint family properties and for allotment to her the properties conveyed by the deeds.
The trial court dismissed the respondents ' suit and decreed the appellant 's suit, which the High Court reversed.
In appeal to this Court, the appellant contended that V. agreed to make the transfers in consideration of past cohabitation, having regard to section 2(d) of the her past service was a valuable consideration and V was competent to alienate for value his undivided interest in the coparcenary properties.
The respondents contended that the transfers were by way of gifts and not in consideration of the past cohabitation, and V was not competent to make a gift of the coparcenary properties and even assuming that the transfers were made in consideration of past cohabitation, they were hit by section 6 (h) of the .
HELD: Under the Madras School of Mitakshara law by which V was governed.
he had no power to make a gift of even his undivided interest in the coparcenary properties to his concubine.
[46C] V and the appellant were parties to an illicit intercourse.
The two agreed to cohabit.
Pursuant to the agreement each rendered services to the other.
Her services were given in exchange for his promise under which she obtained) similar services.
In view of her services, he promised to give his services only and not his properties.
Having once operated as the consideration for his earlier promise.
her past services could not be treated under section 2(d) of the as a subsisting consideration for the properties to her.
The past cohabitation was the motive and not the consideration for the transfers which were without consideration and were by way of gifts.
The gifts were not hit by section 6(h) of the Transfer of property Act, by reason of the fact that they were motivated by a desire to compensate the concubine for her past services.
[45E G] The invalid gifts were not validated by the disruption of the joint family in 1947.
After the disruption of the joint family, V was free to make a gift of his divided interest in the coparcenary properties to the appellant, but he did not make any such gift.
[46D] Balo vs Parbati, I.L.R. [1940] All. 370 and Istalk Kamu Musalman vs Ranchhod Zipru Bhate, I.L.R. , 217 referred to. 44 |
Appeal No. 143 of 1952.
Appeal under article 132(1) of the Constitution of India from the Judgment and Order, dated the 997 11th December, 195 1, of the High Court of Judicature, Rajasthan at Jodhpur in D. B. Civil Miscellaneous Case No. 1 of 1951.
M. C. Setalvad, Attorney Genaral for India and K. section Hajela, Advocate General of Rajasthan, (Porus A. Mehta, with them) for the appellant, N. C. Chatterjee.
and U. M. Trivedi (Jiwan Sinha Chandra and Ganpat Rai, with them) for the respondent.
March 15.
The Judgment of the Court was delivered by GHULAM HASAN J.
This appeal filed on a certificate granted by the High Court of Rajasthan under article 132(1) of the Constitution arises from the judgment and order of the said High Court (Wanchoo C.J. and Bapna J.) in a petition under article 226 of the Constitution, whereby the High Court held that section 8 A inserted in Rajasthan Ordinance No. XXVII of 1948 by section 4 of Rajasthan Ordinance No. X of 1949, and the amendment to section 8 A by section 3 of Rajasthan Ordinance XV of 1949 are void under article 14 of the Constitution and issued a writ restraining the State of Rajasthan from collecting rents from the tenants of lands comprising the Jagir of Bedla held by the respondent.
The respondent Rao Manohar Singhji is the owner of the Jagir of Bedla situate in the former State of Mewar, now included in the State of Rajasthan.
The former State of Mewar was integrated in April, 1948, to form what was known as the former United State of Rajasthan.
In April and May, 1949, the latter State was amalgamated with the former States of Bikaner, Jaipur, Jaisalmer and Jodhpur and the former Union of Matsya to form the present United State of Rajasthan.
Three Ordinances, No. XXVII of 1948 and Nos.
X and XV of 1949, were issued by the former State of Rajasthan in connection with State Jagirs.
The management of the Jagirs including the Jagir of Bedla was assumed by the former State of Rajasthan in virtue of the powers under these Ordinances.
After the final formation of the State of Rajasthan in May, 129 998 1949, the Ordinances remained in force in a part of the present area of Rajasthan with the result that while jagirs in a part of the area were managed by the State in that area, the Jagirs in the rest of the State were left untouched and remained with the Jagirdars.
On 4th January, 1951, the respondent filed a petition under article 226 of the Constitution contending that the said Ordinances were ultra vires the Constitution and that they became void under article 13 (1) of the Constitution of India, read with articles 14 and 31.
The respondent challenged the Ordinances firstly because they constitute an infringement of articles 14, 19 and 31 of the Constitution and secondly because the Jagirdars only of the former State of Rajasthan which was formed in 1948 are prejudicially affected, while Jagirdars of the States which integrated later on are not at all affected (Para 9, K and L).
It was alleged that there was a denial of equality before the law and the equal protection of the laws by reason of these Ordinances and further that the State had taken possession of the property of the respondent without providing for compensation.
The reply of the State was that the Jagir was a State grant held at the pleasure of the Ruler and that it reverted to the Ruler on the death of the holder of the Jagir and was regranted to his successor after the Ruler had recognized the succession.
The rights of the Jagirdars were non heritable and nontransferable and the Jagirs could not be partitioned amongst the heirs of the Jagirdar.
It was pleaded therefore that even if the State took possession of the Jagir, the Jagirdar was not entitled to compensation under article 31 (2).
It was also alleged that the impugned Ordinances had merely the effect of transferring the management of the Jagirs to the Government and did not deprive the Jagirdars of their property and they were consequently not hit by article 31 (2).
It was denied that there was any discrimination under article 14 of the Constitution.
The High Court held on the first question that the pro I visions of Ordinances Nos.
X and XV of 1949 are not void under article 31 (2) or 19 (1) (f ).
On the second point they recorded the conclusion that section 8 A which was introduced in Ordinance No. XXVII of 1948, by section 999 4 of Ordinance No. X of 1949, and the amendment to section 8 A by section 3 of Rajasthan Ordinance No. XV of 1949, are void under article 13 (1) of the Constitution, read with article 14.
The High Court accordingly, allowed the petition and prohibited the State from collecting rents from the tenants of the land comprising the Jagir of Bedla held by the respondent.
This judgment was given on 11th December, 1951, but we understand that since then the State has passed Acts abolishing Jagirs throughout the State.
The question however is of some importance to the respondent inasmuch as it affects his right of collecting the rents even though for a short period.
In appeal it is contended by the learned AttorneyGeneral on behalf of the State of Rajasthan that the decision of the High Court that the impugned section 8 A as amended was hit by article 14 of the Constitution is erroneous.
Before deciding the validity of this contention it will be necessary to refer briefly to the relative provisions of the Ordinances.
Ordinance No. I of 1948 (the United State of Rajasthan Administration Ordinance, 1948) was made and promulgated on April 28, 1948, by the Rajpramukh of Rajasthan to provide for the administration of the United State ,of Rajasthan after the latter came into existence.
On July 26, 1948, Ordinance No. XXVII of 1948, [the United State of Rajasthan Jagirdars (Abolition of Powers) Ordinance, 1948] was made and promulgated by the Rajpramukh providing for the abolition of judicial powers of Jagirdars and executive powers in connection with the judiciary and vesting them in the Government.
Section 8 of this Ordinance authorised the Government to make orders with a view to carrying out and giving effect to the provisions and pur poses of the Ordinance and the various powers enumerated in that section.
Then came section 8 A which was introduced by Ordinance X of 1949 [the United State of Rajasthan Jagirdars (Abolition of Powers) (Amendment) Ordinance, 1949].
It reads thus: "Without prejudice to the generality of the foregoing provisions, it is hereby enacted that the revenue which was heretofore collected by Jagirdars shall 1000 henceforward be collected by and paid to the Government; the Government will after deducting the collection and other expenses pay.
it to the Jagirdar concerned.
" It was amended by section 3 of Ordinance No. XV of 1949 [the United State of Rajasthan Jagirdars (Abolition of Powers) (2nd Amendment) Ordinance, 1949] by adding to section 8 A after the word 'Revenue ' the following: " Including taxes, cesses and other revenue from forests.
" It is not denied that when the State of Rajasthan was formed in April and May, 1949, the Jagirdars of only a part of the present State of Rajasthan could not collect their rents while Jagirdars in other areas which were covered by Jaipur, Bikaner, Jaisalmer and Jodhpur and Matsya Union were under no such disability.
It appears that in the former State of Rajasthan provisions regarding the management by Government of Jagirs and the right to collect rents already existed, whereas there was no such provision in the former States of Jaipur, Bikaner, Jaisalmer and Jodhpur and Matsya Union, but when the integration took place in April and May, 1949, the discrimination exhibited itself not by virtue of anything inherent in the impugned Ordinances but by reason of the fact that Jagirdars of one part of the present State of Rajasthan were already subjected to a disability in the matter of management of their Jagirs while the other parts were wholly unaffected.
This discrimination, however undesirable, was not open to any exception until the Constitution came into force on January 26, 1950, when article 13 of the Constitution declared that "all laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void.
" It becomes therefore necessary to see whether the impugned provision which is discriminatory on the face of it is hit by article 14 which declares that "the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.," Such an obvious discrimination 1001 can be supported only on the ground that it was based upon,,,& reasonable classification.
It is now well settled by the decision of this court that a proper classification must always bear a reasonable and just relation to the things in respect of which it is proposed.
Judged by this criterion it seems to us that the discrimination is based on no classification at all and is manifestly unreasonable and arbitrary.
The classification might have been justified if the State had shown that it was based upon a substantial distinction, namely that the Jagirdars of the area subjected to the disability were in some way different to those of the other area of Rajasthan who were not similarly situated.
It was perfectly possible for the State to have raised a specific ground in order to get out of the mischief of article 14, that the discrimination was based upon what the learned Attorney General called geographical consideration, that the Jagirs of the particular area were governed by different laws of tenure and thus constituted a class by itself and that that was a good ground for differentiation.
No such ground was ever put forward before the High Court, much less was any attempt made to substantiate such a ground.
In the absence of any allegation supported by evidence we are unabe to find in favour of the State that the Jagirdars of the particular area to which category the respondent belongs were differently situated to other Jagirdars.
The preambles of the Ordinances do not purport to show that the conditions in the former State of Rajasthan were such as to justify the imposition of the disability on the Jagirdars of that State while the conditions prevailing in the other States forbade such a course.
The High Court held that the Ordinance abolishing the Police and the Judicial powers and the administrative powers of the Jagirdars in respect to revenue in forests was open to no objection but there was no reason for taking away from the Jagirdars by section 8 A the power to collect rents to which they were entitled.
We agree with the High Court in holding that there was no real and substantial distinction why the Jagirdars of a particular area should continue to be 1002 treated with inequality as compared with the Jagirdars in another area of Rajasthan.
We hold therefore that no rational basis for any classification or differentiation has been made out.
Section 8 A of the impugned Ordinance as amended is a clear contravention of the respondent 's right under article 14 of the Constitution and must be declared void.
The case of Frank J. Bowman vs Edward A. Lewis(1) relied upon by the learned Attorney General on behalf of the State is inapplicable to the facts and circumstances of the present case.
By the Constitution and laws of Missouri the citizens residing in one hundred and nine counties of the State of Missouri had the right and privilege of an unrestricted appeal to the supreme Court of the State, while, at the same time the right of appeal was denied to the citizens of the State residing in four of the counties in the easterly portion of the State, as also to those residing in the City of St. Louis.
It was contended that this feature of the judicial system of Missouri was in conflict with the 14th Amendment of the Constitution of the United States.
Bradley J. held that the equality clause in the 14th Amendment contemplates the protection of persons against unjust discriminations by a State; it has no reference to territorial or municipal arrangements made for different portions of a State.
He went on to say: " If a Mexican State should be acquired by treaty and added to an adjoining State or part of a State, in the United States, and the two should be erected into.a new State, it cannot be doubted that such new State might allow the Mexican 1aws and judicature to continue unchanged in the one portion, and the common law and its corresponding judicature in the other portion.
Such an arrangement would not be prohibited by any fair construction of the 14th Amendment.
It would not be based on any respect of persons or classes, but on municipal considerations alone, and a regard to the welfare of all classes within the particular territory or jurisdiction.
" This passage which was strongly relied upon by the learned Attorney General does not advance his case (1) 1O1 U.S 22; ; 1003 for in the present cage there is no question of continuing unchanged @the old laws and judicature in one portion and a different law in the other.
As we have already said there is nothing to show that there as any peculiarity or any special feature in the Jagirs of the former State of Rajasthan to justify differentiation from the Jagirs comprised in the States which subsequently integrated into the present United State of Rajasthan.
After the new State was formed, there was no occasion to take away the powers of Jagirdars of a disfavoured area and to leave them intact in the rest of the area.
The case in Ramjilal vs Income tax Officer, Mohindargarh (1) is distinguishable on the ground that that case proceeded upon the principle that "pending proceedings should be concluded according to the law applicable at the time when the rights or liabilities accrued and the proceeding commenced was a reasonable law founded upon a reasonable classification of the assessees which is permissible under the equal protection clause.
" Such is however not the case here.
Reliance was also placed on the case of The State of Punjab vs Ajaib Singh and Another(1).
In that case the Abducted Persons (Recovery and Restoration) Act of 1949 was not held to be unconstitutional under article 14 upon the ground that it extended only to the several States mentioned in section 1(2), for in the opinion of the court classification could well be made on a geographical basis.
There the Muslim abducted persons found in those States were held to form one class having similar interests to protect and their inclusion in the definition of abducted persons could not be called discriminatory.
; The learned Attorney General referred to two cases decided by the same.
Bench of the Rajasthan High Court, Thakur Madan Singh vs Collector of Sikar(3), and an unreported judgment delivered on November 10, 1953, In re, Raja Hari Singh vs Rajasthan and argued (1) (1951] S.C.R. 127.
(2) ; (3) Rajasthan Law Weekly, 1954, P.1.
1004 that the Bench had not stuck to its view expressed in the judgment under appeal.
A careful, perusal of the judgments in these cases will show that this is far from being the case.
The former case was distinguished from the case under appeal on the ground that there was a reasonable basis for classification in that case, while no such basis existed in the case before us.
It appears that before Jaipur State merged into the present United State of Rajasthan there were District Boards existing in that State.
They were continued on the formation of the new State but there were no District Boards in the other States.
The argument that the Jaipur District Boards Act was invalid under article 14 of the Constitution was repelled it being held that the existence of District Boards in Jaipur was for the welfare of all classes within Jaipur that Jaipur had reached a higher stage of development than many of the other States and it would have been a retrograde step to deprive the People living in the former Jaipur State of the benefits of Local Self Government conferred by the District Boards Act.
Reliance was placed on the observations of Bradley J. in Frank J. Bowman vs Edward A. Lewis(1) in connection with the illustration of the Mexican State and* the learned Chief Justice referred with approval to the decision under appeal before us.
In the second case the attack was on the alleged discriminatory provision contained in the Mewar Tenancy Act and the Land Revenue Act.
Under these Acts the rent rates had been approved by the Board of Revenue and the Government and they were alleged to be detrimental to the interests of the Jagirdars.
The Jagirdars had challenged those Acts by a petition under article 226.
It appears that no such laws existed in the other parts of Rajasthan.
The decision of the High Court proceeded on the ground that it was not shown that there were no similar tenancy and Land Revenue laws in other parts of Rajasthan and the impugned Acts being ameliorative legislation designed to raise the economic status of the agriculturists in Mewar could not be said to constitute any discrimination merely because no such legislation (1) ; ; 1005 existed in the other parts of Rajasthan .
This difference between the two parts did not justify that such progressive and ameliorative measures for the welfare of the people existing in a particular area should be done, away with and the State be brought down to the level of the unprogressive States.
The judgment shows that the Bench far from going back on its previous view adhered to it and expressly distinguished the case under appeal before us on its special facts.
As a result of the foregoing discussion we hold that the view taken by the High Court is correct.
We accordingly dismiss the, appeal with costs.
Appeal dismissed. | Hold, that section 8 A inserted in Rajasthan Ordinance XXVII of 1948 by section 4 of Rajasthan Ordinance X of, 1949 and as amended by section 3 of Rajasthan Ordinance XV of 1949 is void under article 14 of the Constitution.
Frank J. Bowman vs Edward A. Lewis ; ; 25 Law.
Ed. 989), Ramjilal vs Income Tax Officer, Mohindargarh ([1951] S.C.R. 127), The State of Punjab vs Ajaib Singh ([1953] S.C.R. 254) and Thakur Madan Singh vs Collector of Sikar (Rajasthan Law Weekly, 1954, p. 1), referred to. |
Appeal No. 2399 of 1966.
Appeal from the judgment aid decree dated June 16, 1964 of the Mysore High Court in Regular Appeal No. 229 of 1958.
Sarjoo Prasad, O. P. Malhotra, and 0.
C. Mathur, for the appellants.
A. K. Sen, B. P. Singh and R. B. Datar, for the respondent.
126 The Judgment of BACHAWAT and BHARGAVA, JJ. was delivered by BHARGAVA, J. SHELAT, J. delivered a dissenting Opinion.
Bhargava, J. We have had the benefit of reading the judg ment proposed to be delivered by our brother Shelat, J., but regret that we are unable to agree with him.
The facts of this case have already been given in his judgment and need not be reproduced.
As held by him, it is correct that until the Hindu Law Wo men 's Rights Act, 1933 (Mysore Act X of 1933) (hereinafter referred to as "the Act") was passed, no female in Mysore had a right to share in joint Hindu family property under the Mitaksbara Law as applied in that area.
The right of Hindu woman in it joint Hindu family was confined to maintenance, residence and marriage expenses.
The Act for the first time enlarged her rights.
The Mysore High Court in Venkatachaliah vs Ramalingiah(1) stated this principle and, in our opinion, correctly.
It was also correctly held by that Court that the object of section 8 ,of the Act is to confer larger rights on females by giving them a share in the joint family property.
It is, however, to be noticed that section 8, in conferring rights on females, envisages two different circumstances in which that right is to accrue to them.
The first circumstance is when there is a partition of the joint family property between any co parceners, and the other is when, though there is no partition, the entire joint Hindu family property passes to a single male owner.
It is in both these cases that the Act envisages that the property may lose its character of co parcenary property, because the co parcenary body may cease to exist on partition or on survival of a single male member of the family.
It seems that the purpose of section 8 was to safeguard the interests of females in such contingencies where the co parcenary property is to disappear either by partition or by survival of a sole male member.
The legislature seems to have felt that, in such circumstances, it was not safe to leave the females entitled to maintenance, etc, at the mercy of the individuals who may receive property on partition or at the mercy of the individual in whom absolute rights in the property might vest as a result of sole survivorship.
For the first contingency, when there is a partition, provision was made in clauses (a), (b) & (c) of sub section (1) of section 8 under which a right was granted to the females to ask for separation of their shares if the male members decided to have a partition.
Unless the male members themselves sought a partition, it was not considered necessary to grant any right to the females themselves to ask for partition, because the property could not lose its character as co parcenary property until the male members of the family sought partition.
The right of the females under clauses (a), (b) & (c) of section 8(1), therefore, only arises at a partition between the male co parceners forming the joint Hindu family.
127 For the second contingency, when the co parcenary property passes to a sole, survivor.
provision has been made in clause (d) of section 8(1).
This clause, in protecting the rights of females, had necessarily to give to the females the right to the share in the coparcenary property even if there be no partition at all, because, on the passing of the property to a sole survivor, there could not possibly be any partition sought by the male members of the coparcenary body.
This right conferred by clause (d) is not, therefore ' in any way dependent on any partition being sought, or on any right accruing to the females earlier under clauses (a), (b) and (c).
The latter three clauses relate to the right arising and being exercised simultaneously at the time of a partition between the male members of the co parcenary body, while the right under cl.
(d) has been given for those cases when there can be no partition at all.
The right conferred by clause (d) is, therefore, an independent right and not connected with the rights granted to the females under clauses (a), (b) & (c).
In these circumstances, it appears to us that, when determining the scope of the right under clause (d), there is no need to envisage an assumed, parti tion and there is no justification for holding that clause (d) must be interpreted on the basis of an assumed partition between the sole surviving member of the family and the co parcener who immediately pre deceased as a result of whose death the property passed to the sole survivor.
The reference to clauses (a), (b) & (c) clause (d) seems to have created an impression that such a partition must be assumed in order to determine the rights of the females accruing to them under clause (d).
It is true that the language in which cl.
(d) is expressed is a little ambiguous, but it seems to us that the reference to clauses (a), (b) and (c) in clause (d) is for the sole purpose of determining all the females who are to get benefit under that clause.
The females who are to get benefit are all those to whom a right to a share in the joint family property would have accrued if there had been a partition either under clause (a), or clause (b) or clause (c).
The scheme of section 8(1), thus, is that if there is a partition as envisaged in clause (a), the females mentioned in that clause only get a right to the share in the property.
If there is a partition between male members mentioned in clause (b), then the right to the share accrues to the females mentioned in that clause.
Clause (c) is wider, because it does not specifically enumerate the females who are to get a share.
Clause (c) only lays down that clauses (a) and (b) are to apply mutatis mutandiv to a partition among other co parceners in a joint family.
This language itself means that, even though under clause (c) a partition will be between members of a joint family who are not related to each other in the manner given in clauses (a) and (b), yet the females who are to 128 receive a share are to be ascertained with reference to clauses (a) & (b).
Under clause (a), a partition envisaged is between a person and his son or sons, and the females who are to received a share are his mother, his unmarried daughters and the widows and unmarried daughters of his predeceased undivided sons and brothers who have left no male issue.
The question arises how the females entitled to a share in clause (c) are to be ascertained with reference to this clause when the partition is not between ' a person and his son or sons.
Clause (c) clearly applies only to a case where the partition is between members of the family not related in the manner laid down in clause (a), and yet the ascertainment of the females who are to receive a share at that partition is to be by reference to clause (a).
The same applies when the partition under clause (c) is between persons not related in the manner envisaged in clause (b) and yet the females mentioned in clause (b) are to be ascertained for the purpose of being granted the share mentioned in clause (c).
An example may be taken.
Supposing there is a partition between, a person and his brother 's son.
In such a case, clause (c) lays down that the females entitled to a share are to be ascertained by reference to clauses (a) and (b).
The result is that, in such a case, by applying clause (a), the females entitled would be the mother, the unmarried daughters, the widows and unmarried daughters of predeceased undivided sons and brothers of both the uncle as well as the nephew.
Simi larly, in ascertaining the females by reference to clause (b) in such a partition, the females included will be the mothers, the unmarried sisters, the widows and unmarried daughters of the predeceased undivided brothers of both the uncle and the nephew.
This example makes it clear that the scope of ascertainment of the females who are to receive a share under clause (d) must be very wide, because cl.
(d) mentions that when the joint family property passes to a single co parcener by survivorship, the right to shares is vested in all the clauses of females enumerated in all the three clauses (a), (b) and (c).
That being the position, we do not think that clause (d) can be interpreted narrowly as giving a right to only those females who happen to be related to one or the other of the last two male co parceners in the manner laid down in clauses (a) and (b).
In fact, the language of clause (d) has to be interpreted as laying down that right to shares will vest in all females of the joint Hindu family who would have possibly received the right to a share if at any earlier time there had been partition in the family in any of the three manners laid down in clauses (a), (b) and (c).
This intention can only be given effect to on the basis that clause (d) does not restrict itself to finding out females on the basis of an assumed partition between the last two male co parceners.
It is significant that clause (d) gives a right independently of a partition and we do not see why its scope should be restricted by assuming a partition.
The reference to 129 the earlier clauses in this clause must be held to be restricted to the sole purpose of ascertainment of the females falling under clauses (a), (b) and (c), and once they are ascertained, it has to be held that each one of them becomes entitled to a share under this clause.
The object of clause (d) is to give to all females entitled to maintenance 'from the co parcenary property a right to claim a share in the joint family property instead of a right to maintenance, and that is why reference is made in it to all the females enumerated ' in clauses (a).
(b) and (c).
Clauses (a) and (b) refer to four classes of females, viz, the mother, the widow.
the unmarried daughter and the unmarried sister.
All these four classes of females are within clause (d).
The actual share which a female becomes entitled to under clauses (a), (b), (c) or (d) has to be ascertained with reference to subsection (2) of section 8 Further, in ascertaining the females to whom rights accrue to shares in the joint family property either on partition under clauses (a), (b) or (c), or on passing of the property to a sole survivor under clause (d).
effect has to be given to sub section 3) of section 8 in which the scope of the words "widow", "mother", and " son" is enlarged and which, in addition, lays down that the provisions of this whole section relating to the mother are to apply mutatis mutandis to the paternal grandmother and great grandmother.
Consequently, when the classes of females entitled to shares under clause (d) are to be ascertained and it is to be found out whether mother mentioned in clause (a) or clause (b) is entitled to a share, the persons included in the expression "mother" would be a "step mother" and, further, the provision conforming the right on the mother would also confer the right on paternal grandmother and great grandmother, because clauses (1) and (b), which relate to a mother, are to be applicable mutatis mutandis to paternal grandmother and great grandmother also.
It is clear that, on this interpretation of clause (d) read with clauses (a) (b) and (c) and sub section (3) of section 8, the decision given in the present case by the High Court is correct and the respondent is a person entitled to share as held by that Court.
As the widow of Mendappa, a co parcener, she was clearly entitled to a one fourth share.
In Dakshinamurthy vs Subbamma(1), the widow of one Sreekantachari sued her husband 's brother for partition and possession of a quarter share of property formerly belonging to the joint family of her husband, and his brother.
Reilly, C. J., and Venkataranga Iyengar, J., held that the plaintiff was clearly one of the women to whom clause (d) of sub section
(1) of s, 8 applied.
This ruling has always been followed in Mysore and is in accord with the view expressed by us above.
Referring to the last case, (1) L/P(N)ISCI 10 130 Venkataramana Rao, C. J., observed in Pogaku Venkatachall 'iah "But whatever may be said of the rights of the female member under clause (a.), her rights under clause (d) are different.
The right of a female member to share the property is not limited as under clause (a) to arise only on a partition of the joint family property, but her right as pointed out in Dakshinamurthy vs Subbamma arises from the moment when the property passes to a single co parcener.
" In Kolla Narasimha setty V. Nanjamma(2) Reilly, C.J. point ed out with reference to sub section (1)(a) of section 8: "The purpose of the sub section appears to me to be to give women of the family who otherwise would have a right to maintenance against the whole family right to claim a share in such a partition instead ' of.
having to be content with a right to maintenance." ' In Venkatagowda vs Sivanna(3), the facts were that R had a son K by the widow G. K.died leaving his widow L and his son M. Thereafter, R died leaving M as the sole surviving co parcener.
Clearly, G as, the widow of R was entitled to, a one fourth share.
The Mysore High Court also came to that conclusion, though we must say that we do not agree with all the observations made in the judgment.
The Court in that case was in error in postulating a partition taking place between M and R, treating the latter as alive.
As a result of our decision above.
the appeal fails and is dismissed with costs.
Shelat, J. One Mendappa died on October 29,1951 leaving him surviving his first wife Devamma the third defendant, Kem pananjamma the plaintiff, a grandson Mahendra the first defendant and Dakshaiyaniamma the widow of his predeceased son Guruswami, the second defendant.
The case of the said Kempananjamma was that on Mendappa 's death the family property passed to the first defendant, he being the sole surviving coparcener, subject to her rights and those of defendants 2 ' and 3.
The case of defendants 1 and 2, on the other hand.
was that the plaintiff as the step grandmother of the first defendant was not one of the female relatives entitled to any share in the property which vested on the death of Mendappa in the, 1st defendant as the sole surviving coparcener.
The Trial Court decreed the suit holding that the plaintiff was entitled to 18th share.
In an (1)49 My H.C.R.456 (2) at p. 474.
(3) 131 appeal to the High Court by Nagendra the parties agreed that the view of the former High Court of Mysore, that section 8(1) for the first time created a right to a share in favour of certain females in the circumstances set out therein, that under cls.
(a), (b) and (c) the right to such share can be exercised only in the event of a partition and that unlike cls.
(a), (b) and (c), cl.
(d) gave the female relatives covered by that clause a right to claim a partition when the joint family property passed on to the sole surviving coparcener, was correct.
The High Court stated that cl.
(d) contained two important expressions: (i) "subject to the right to shares" and (ii) "of the classes of females enumerated in the above subsections," i.e., the classes of females enumerated in cls.
(a), (b) and (c); that therefore the females in cl.
(d) did not constitute a sepa rate class independently of cls.
(a), (b), and (c).
In the High Court 's view cl.
(d) takes in not only the female relatives of the penultimate and the sole surviving coparcener but also of all those who predeceased them and that for ascertaining the females entitled to a share, one must assume that there was a partition under cls.
(a), (b) and (c).
Accordingly, it held that the widow of the grandfather of the sole surviving coparcener being the widow of a deceased coparcener fell under cl.
But since Mendappa left Nagendra, a male issue, who would be his son under the definition of a son in sub section 3.
the plaintiff would not be entitled to a share as the widow of the said Mendappa.
She would, however, be entitled to a right to a share as the step grandmother as sub section 3 defines a son as including a grandson and a mother as including a paternal grandmother.
Since a mother includes a step mother the plaintiff was the mother of Guruswamy and the paternal grandmother of Nagendra and therefore his mother under sub section 3 and was as such entitled to a right to a share under cl.
This appeal by certificate is directed against this interpretation of cl.
Before the Mysore Act X of 1933 was passed no female had a right to a share in the joint family property under the Mitakshara Law as applied to Mysore, her right being confined only to maintenance, residence or marriage expenses, The Act for the first time enlarged these rights and provided for a share at a partition between coparceners.
The Act, however.
does not entitle the female relatives to a share unless a partition takes place between coparceners.
Further.
the females entitled to a share are only those enumerated in section 8(1).
The Act gives them no right to demand partition if the coparceners choose to remain joint.
(See Mayne 's Hindu Law, IIth Ed.
p. 531.
Mulla 's Hindu Law, 13th Ed.
p. 98 and Venkatapathiah vs Saraswathamma(1).
Therefore the right of these female relatives is not a vested but a contingent right.
depending upon their falling under one or the other clauses (1) 16 My. HC.
Reports 273, 277.
132 of the sub section both as to persons and circumstances obtaining at the time of the partition or the passing of the property under cl.
(d) to the sole surviving coparcener.
Section 8(1) reads as follows: "8.
(1)(a) At a partition of joint family property between a person and his son or sons, his mother, his unmarried daughters and the widows and unmarried daughters of his predeceased undivided sons and brothers who have left no male issue shall be entitled to share with them.
(b)At a partition of joint family property among brothers, their mother, their unmarried sisters and the widows and unmarried daughters of their predeceased undivided brothers who have left no male issue shall be entitled to share with them; (c)sub sections (a) and (b) shall also apply mutatis mutandis to a partition among other coparceners in a joint family.
(d)Where joint family property passes to a single coparcener by survivorship, it shall so pass subject to the right to share of the classes of females enumerated in the above sub sections.
" Sub section 2 fixes the shares of the aforesaid female rela tives.
Sub section 3 inter alia defines the term "mother" as including, where there are both a mother and a step mother, all of them jointly and the term "son" as including a stepson, a grandson and a great grandson.
It also provides that the provisions ,of this section relating to the mother shall be applicable, mutatis mutandis, to the paternal grandmother and great grandmother.
Clause (a) applies on a partition between a person and his son or sons and the females entitled to a share thereunder are (a) the mother of that person, (b) his unmarried daughters, (c) the widows of his predeceased undivided sons who have left no male issue, (d) the unmarried daughters of his predeceased sons who have left no male issue and (e) the widows and unmarried daughters of his predeceased undivided brothers who have left no male, issue.
In Narasimha Setty vs Nagamma(1) the Mysore High Court interpreted the expression "who have left no male issue" in cl.
(a) as applicable to the time when the partition takes place.
The widow of a predeceased undivided son therefore has a share at a partition even if she had a son by her husband if such son has not survived at the time of the partition.
Under sub section 3 a son includes a stepson, grandson and great grandson, but a (1) 18 May L.J. 461.
133 mother though including a step mother does not include a grandmother or a great grandmother.
Therefore, if there is both a mother and a paternal grandmother the latter will not have a share.
But if the mother is not alive, then, by virtue of subsection 3 the paternal grandmother of that person, that is the father, gets a share.
Thus, all the female relatives in a family do not get shares.
A simple illustration will clarify this position.
A has two sons B and C and a predeceased son D4 At a partition between A, B and C, the wives and daughters of B and C do not get any share; so also the widow or widows and the unmarried daughters of D do not get any share if he left a male issue.
The wife of a coparcener participating in a partition has also no share.
Strangely, though the unmarried daughters of A get shares, though, he has a son.
the unmarried daughters of B and C do not get any share.
Clause (b) contemplates a partition between brothers.
The female relatives who have a right to a share at such partition are (a) their mother, (b) their unmarried sisters and (c) the widows and unmarried daughters of predeceased undivided brothers who have left no male issue.
No other female is entitled to a share.
Continuing the previous illustration, if A dies and a partition takes place between his sons, B and C, the case would fall under clause (b).
Under clause (a) the wife of A had no share but now that A is dead his widow has a share not as his widow but as the mother of B and C. The unmarried daughters of A who had a share under clause (a) now have a share but in a different capacity, as the unmarried sisters of B and C. Similarly, the widow and unmarried daughters of D, who had shares as the widow and unmarried daughters of a predeceased son would have shares as the widow and unmarried daughters of the predeceased brother of B and C.
It will be seen that the widows and unmarried daughters of the predeceased brothers of A would have no share though they would have had shares under clause (a) if A was alive and the partition was between him and his sons, B and C.
Thus, with the change in circumstances, certain females lose their right to shares while certain others though having a right to shares take in different capacity.
Clause (c) applies where there is a partition between copar ceners other than those under cis.
(a) and (b).
For instance, it applies to a partition between an uncle and a nephew or between cousins.
In such a case the clause enjoins application mutatis mutandis of the principles of cls.
(a) and (b).
The following illustration clarifies the meaning of cl.
A and B and C are brothers.
A and B has each a son, X and Y, but C has no son.
C dies leaving a widow, Z. A and B die.
There is a partition between X and Y. The provisions of cl.
(a) will not apply as they relate to the female relatives of the father in a partition between him and his son or sons.
Therefore, the females enumerated in clause (a) 134 will not have a right to shares.
In Nagendradasa vs Ramakrishnan(1) the Mysore High Court treated the mother of the coparcener concerned in the partition as entitled to a share except when she was the widowed daughter in law of the coparcener taking part in the partition.
On this basis the mothers of X and Y would be entitled to shares but even on this interpretation, Z, the widow of C will not have a share, she being neither the mother of the partitioning coparceners, X or Y, nor the widow of a predeceased brother of X and Y.
But if B were alive and the partition was between him, his son Y and nephew X, the widow of C would take a share under the principles of cl.
(b), as the widow of a predeceased brother provided C has not left a male issue.
If A has left a widow D she takes a share, not as A 's widow but as the mother of X.
If the mother of A and B were alive, she would take a share as the mother of B. The widow of C, the predeceased brother of B would be entitled under cl.
(b) to a share as the widow of the predeceased undivided brother who left no male issue.
Only certain females thus have a right to a share at a partition depending upon which of the clauses (a) or (b) or (c) applies and the situation obtaining at the time of such partition.
A female entitled to a share under clause (a) might lose that right if the situation changes from (a) to (b) or (c).
By reason of section 2(2), however, this would not mean that a female who had a right e.g., of maintenance or of marriage expenses or of residence, is deprived of that right.
That sub section expressly reserves such a right.
What section 8(1) does is to enlarge such a right into a right to a share for certain female relatives to whom one or the other clause applies.
Clause (d) applies to a case when the family property passes by survivorship to a sole surviving coparcener.
In such a case there can be no partition, as is the case under clause (a) or (b) or (c).
Indeed, the property becomes incapable of partition and but for clause (d) no female relative would have any right to a share.
To save such a result clause (d) provides that the rights of the female relatives should not be lost only by reason of the property passing to the sole surviving coparcener.
Sub section 5, furthermore, gives such female relatives as fall under sub section 1 a right to have their shares separated and thus makes them co sharers subject to whose rights the sole surviving coparcener takes the property.
Therefore, whereas under clauses (a), (b) and (c) the rights fluctuate according to the position of the female relatives in the family when the partition takes place there is no such uncertainty in the case falling under cl.
(d) as the sole surviving coparcener takes 'the property subject to the right to shares of female relatives falling under the provisions of clause (a) or (b) or (c).
Such is the scheme of section 8(1).
(1) 135 Certain decisions of the Mysore High Court under section 8(1) may at this stage be noticed.
In Dakshnaimurthy vs Subbamma(1) the widow of S sued her husband 's brother for partition and possession of her share.
The claim was on the footing that her husband and the defendant were the only coparceners of the joint family and that on S 's death the defendant became the sole Surviving coparcener.
S left no male issue.
The High Court held that cl.
(d) applied, and that under sub section 5 the widow had the right to sue for partition the moment section died and the property passed to the defendant by survivorship as the sole surviving coparcener.
This decision can only be justified on the round hat for purposes of ascertaining the females entitled to a right to a share one must assume as if there was a partition between the penultimate, coparcener and the sole surviving coparcener and that it is only then that one can ascertain the females subject to whose right to shares the property passes by survivorship.
Since the penultimate coparcener and the surviving coparcener were brothers, the Court for purposes of cl.
(d) assumed partition between brothers and applied the principles of cl.
(b) and held that S 's widow was entitled to a share in her capacity as the widow of the predeceased undivided brother.
In Venkatachaliah vs Ramalingiah(2) the High Court held that the object of section 8(1) being to confer larger rights on females by giving them a share in the family property clause (d) has effected a departure from the law which prevailed before the enactment by making the specified females co sharers along with the Single coparcener when the joint family property passes to him by survivorship.
In Venkategowda vs Sivanna(3) a SingleJudge of the 'High Court, however, went further than these decisions.
In that case R bad a son K by his wife G. K died in 1936 leaving his widow L and a son M. Later on R died whereupon the joint family property passed to M as the sole surviving coparcener.
The question was whether cl.
(d) applied and G. the widow of R, had a right to a share.
Narayana Pai J. held that G was entitled to 1/4th share, i.e., half of what R would have not if a partition had taken place between R and M. He observed: "The position contemplated under cl.
(d) of sub section 1 of section 8 is one where of the two coparceners living one dies survived by the other alone as the single coparcener.
When both were alive both had an interest in the joint family property.
Although upon the death of one of them.
the entire property passed by survivorship to the survivor, the interest that really passes is the interest of the deceased coparcener.
In strict theory of the Mitakshara Law nothing really passes on the death of the one but the death of one merely enlarges the interest of the survivor.
When however the section contemplates some (1) 45 My.
H.C. Reports 102.
(2) 49 My.
H.C. Reports 456.
(3) 136 property or interest as passing, the natural meaning is that what passes is the property or interest of the deceased coparcener to the surviving coparcener.
It is this interest that is made to pass subject to the right to shares of classes of females entitled to receive such shares.
The expression "share" necessarily contemplates a partition because it is upon partition that a share is ascertained.
It 'IS necessary therefore to theoretically postulate a partition to ascertain both the classes of females entitled to shares as well as the shares to which they are entitled.
From the wording of the section the appropriate time at which such a theoretical partition must be postulated to have taken place is the time of the death of the last but one coparcener.
At such a partition.
the male coparceners participating therein could only be the last two coparceners, the one that died and the other that survived treating the dead coparcener to be alive.
The purpose of treating the dead person to be alive at a partition though dead is obviously to determine the shares of his female relatives by applying the provisions of sub sections 2 and 4 because the shares of those female relatives have to be carved out of his share .
We must therefore in this case postulate a partition taking place between Rangiah treating him as alive and his grandson Mahima.
Although Mahima is grandson of Rangiah, as the term "son" includes a grandson (please see sub sec.
3) that partition would be a partition between a person and his son, that is.
a partition falling under clause (a) of sub section (1).
At that partition Rangiah would get one share and Mahima would get one share.
Mahima 's mother Lakshamma would be the widow of a predeceased son of Rangiah but because she has a son alive.
viz., Mahima.
she will not get a share.
As Rangiah died without partition, his share normally passes intact to the grandson Mahima.
His getting the entire share is prevented by cl.
(d) of sub section 1.
" So far there is no difficulty.
But the learned Judge further observed: "Rangiah did not leave any unmarried daughters; his widow steps in and takes one half of what he, if he were alive, would receive as his share.
In terms of the entire property her share will be 1/4th.
" If for ascertaining the females entitled to a right to a share under cl.
(d), cl.
(a) is applied as the learned Judge did, how would the widow of Rangiah be considered to be one entitled to a share? Clause (a) envisages partition between a person and his son or sons.
Under that clause the widow of that person is not entitled to a share.
But the learned Judge held: 137 "It must be remembered that in ascertaining the shares of the widows of pre deceased sons under cl.
(a) those sons are treated to be alive and have to be allotted one share and their widows will get a half carved out of that share reading cl.
(a) of sub section 2 and sub section 4 together.
In an actual partition under cl.
(a) between living male coparceners therefore the clause contemplates clearly a share being allotted to a widow of a deceased coparcener treated as alive and participating in that partition.
When therefore for the purposes of cl.
(d) we Postulate a theoretical partition between a living and a dead coparcener, there is no violence done to the language of either cl.
(a) or cl.
(d) in living out of the one share of the deceased last but one coparcener one half to his widow and also 1/4th to an unmarried daughter if alive at the time.
" This part of the judgment is contrary to the provisions of clause (a) Assuming that clause (d) postulates a theoretical partition between R and M, G the widow of R gets no share under clause (a).
The case of Dakshnaimurthy(1) relied on by the learned Judge is not applicable as the clause found relevant there was clause (b) under which the widow of a pre deceased undivided brother was held to be entitled to a share on the footing that the assumed partition was between brothers.
In that case the property passed by survivorship to the brother as the sole surviving coparcener.
If a theoretical partition were to be assumed between him and his deceased brother, that is, the plaintiff 's husband, it would be a partition between brothers under clause (b) and it was possible to hold that the widow of the predeceased undivided brother was entitled to a share.
Though Act X of 1933 is a social legislation and should be liberally construed the construction has to be in conformity with its language.
These decisions seem to show that the High Court has been inclined to the view that cl.
(d) properly construed requires assumption of a partition between the last but one and the sole surviving coparcener and that on such assumption the females entitled to a right to shares are to be ascertained depending upon which of the three cls.
(a), (b) or (c) applied considering, the relationship in which the last but one coparcener and the sole surviving coparcener stood.
Is the step grandmother of Nagendra then entitled to a right to a share under cl.
(d)? Where clause (a) applies i.e., where partition takes place between a father and his son or sons the females entitled to a share are the mother the unmarried daughters of such a father and the unmarried daughters of his predeceased sons and brothers who have left no male issue.
The wife of such a father has no share.
Clause (b) cannot apply where the surviving coparcener (1) 138 and the last but one coparcener are the grandson and grandfather a,, the partition contemplated thereunder is between brothers.
Norwould cl.
(c) apply as the partition there is between coparcener, ,other than those under cl.
(a) and cl.
Under sub section a son includes a grandson and great grandson.
Nagendra would for purposes of this section therefore be a son.
Consequently the partition to be assumed for the purpose of cl.
(d) would be between a father and his son.
Though under sub section 3 a sorry includes a grandson and a great grandson and a mother include, a stepmother a grandmother is not included in the definition of " mother".
The expression " provisions of this section relating to the mother shall be applicable mutatis mutandis to the paternal grandmother and the great grandmother" mean only that the grandmother and the great grandmother of the father would have a share under cl.
(a) but not the grandmother of the son.
Nagendra 's grandmother therefore would have no right to a share.
The important words in clause (d) are: "subject to the right to shares of the classes of females enumerated in the above sub.
sections.
" These words indicate that in a case falling under cl.
(d) where there could be no partition one must ascertain the females entitled to a right to share as if there was a partition between the last but one.
coparcener and the sole surviving coparcener.
If that is not done there is no method by which female relatives subject to whose right the sole surviving coparcener takes the property can be ascertained and cl.
(d) would become infructuous.
There can be a right to a share only if there is a partition and not otherwise.
There is.
a distinct difference between cases falling under cls.
(a), (b) or (c) where a share vests in the female relatives enumerated therein when actual partition takes place and cl.
(d) where no partition can occur.
A partition has therefore to be assumed because it is only on such assumption that females or whom a right to a share is conferred can be ascertained, i.e., those females who on such partition, if one had taken place.
would have 'been entitled to a share.
The question as to who are those females entitled to such a share depend upon which of the clauses (a).
(b) or (c) applies to such a theoretical partition.
In the present case.
in view of the definition of a 'son ' in sub section 3 the assumed partition would be between a father and a son under cl.
(a) and .the plaintiff would be entitled to a share only if she is one of those enumerated in that clause.
Her claim was either as the widow of Mendappa.
the last but one coparcener or as the step grandmother of the appellants the sole surviving coparcener.
In whatever capacity she may claim a right to a share, as cl.
(d) is phrased she would have such a share provided she falls under one or the other enumerated classes under cl.
(a), (b) or (c) as the case may be.
For, clause (d) does nor create any independent class.
If the assumed partition were to be 139 between Mendappa and the appellant, the appellant by reason of sub sec.
3 being a son, the partition would be under cl.
In that case the respondent would have no right to a share either as the wife of Mendappa or as the grandmother of the appellant.
The High Court took the view that cl.
(d) would take in not only the female relatives of the last but one and the sole surviving coparcener but also of those who predeceased them and on the assumption that there was a partition between them and the surviving coparcener.
Therefore, according to the High Court, the respondent as the widow of the grandfather of the sole surviving coparcener falls under cl.
(d) as the widow of the predeceased undivided coparcener.
But there are two difficulties in accepting such a view.
Firstly, if a partition is assumed with Guruswamy, the predeceased son of Mendappa, such a partition would be between him and his father Mendappa or between him, Mendappa and the appellant.
Such a partition would attract cl.
(a) in which case the respondent would have no share as only the mother of Mendappa and the widow of the predeceased son i.e, Guruswamy, provided such a son left no male issue, would have a share.
The respondent does not fall in either of the two categories.
The second difficulty is that cl.
(d) does not warrant such a wide construction.
The words "subject to the right to shares of the classes of females enumerated in the above sub sections" must mean those females who fall under one or the other clause on an assumed partition between those coparceners, on the death of one of whom the property passes to the sole surviving coparcener.
The High Court was therefore in error in adopting such a wide interpretation.
The High Court was also in error in holding that the respondent was entitled to a share relying on the definition of a "son" as including a grandson and therefore a mother as meaning a paternal step grandmother.
The mother in cl.
(a) means the mother including the grandmother of Mendappa and not the grandmother of the appellant.
For the reasons aforesaid the judgment and decree of the High Court are set aside and the plaintiff 's suit is dismissed.
There will be no order as to costs.
ORDER in accordance with the opinion of the majority, the appeal is dismissed with costs. | Clause (a) of sub section
(1) of s 8 of the Hindu Law Women 's Rights Act 1933, provided that at a partition of joint family property between a person and his son or sons, those entitled to share with them would be his mother his unmarried daughters, and the widows and unmarried daughters of his predeceased undivided sons and brothers who had no male issue.
Clause (b) provided that when the partition was between brothers, those entitled to share with them would be their mother, their unmarried sisters, and the widows and unmarried daughters of their predeceased undivided brothers who had left no male issue.
According to cl.
(c) clauses (a) and (b) would apply, mutatis mutandis, to a partition among other coparceners in a joint family.
Clause (d) laid down that when a joint family property passed to a single coparcener by survivorship it would so pass subject to the right to share of the classes of females enumerated in the earlier clauses.
Sub s.(2) of section 8 fixed the shares of the aforesaid relatives.
Sub s.(3), inter alia, defined the term 'mother ' as including whether there were both a mother and a step mother, all of them jointly, and the term 'son ' as including a step son, a grandson and a great grandson.
It also provided that the Provisions of the section relating to the mother would be applicable, mutatis mutandis, to the paternal grandmother and great grandmother.
M died in 1951.
The plaintiff respondent was one of his widows and the appellant was his sole surviving grandson.
In a suit for her share filed by the respondent the question was whether in the terms of cl.
(d) of sub section
(1) of section 8 of the aforesaid Act, the respondents was entitled to a share.
The trial court decreed the suit and the High Court upheld the decree.
The appellant came to this Court by certifi cate.
It was contended on behalf of the appellant that cl.
(d) pre supposed a partition between the penultimate and the sole surviving coparceners and that therefore all the femalies in cl.
(a), (b) and (c) could not be said to be entitled to a share.
Held:Per Bachawat and Bhargava, JJ.
When determining the scope of the right under cl.
(d) there is no need to envisage an assumed partition and there is no justification for holding that cl.
(d) must be interpreted on the basis of an assumed partition between the sole surviving member of the family and the co oparcener who immediately pre deceased and as a result of whose death the property passed to the sole survivor.
[127].
The object of cl.
(d) is to give to all females entitled to maintenance from the coparcenary property a right to claim a share in the .joint family property instead of a right to maintenance and that is why reference is made in it to all the females enumerated, in cls.
(a), 125 (b)and (c), Clauses (a) and (b) refer to four classes of females viz. the mother, the widow, the unmarried daughter and the unmarried sister.
All these four classes of females are within el.
[129B C].
Sub section
(3) of section 8 lays down that the provisions of the who lie section relating to the mother are to apply mutatis mutandis to the paternal grandmother and great grandmother.
Consequently when the classes of females entitled to shares under el.
(d) are to be ascertained and it is to be found out whether a mother mentioned in el.
(a) of (b).
is entitled to share, the persons included in the expression 'mother ' would be a 'step mother ' and further, the provision conferring the right on the mother would also confer the right on paternal 'grandmother and great grandmother, because cls.(a) and (b), which relate to a mother are to be applicable mutatis muttandis to paternal grandmother and great grandmother also.
On this interpretation of el.
(d) read with cls.
(a), (b) and (c) and sub section
(3) of s.8.
, the respondent must be held entitled to a share.
As the widow of M a coparcener, she was entitled to a one fourth share.
[ 124D G].
Venkatachaliah vs Ramalingiah, 49 Mysore H.C.R. 456, Dakshinamurthy vs Subbamma, and Kolla Natrasinha Setty vs Nanjamma, approved.
Venkatagowda vs Sivanna, , referred to.
Per Shelat J. (dissenting).
There can be a right to a share only if there is a partition and not otherwise.
There is a distinct difference between cases falling under el.
(a) (b) or (c) when a share vests in the female relatives enumerated therein when actual partition takes place and cl.(d) where no partition can occur.
A partition, has therefore to be assumed because it is only on such assumption that females on whom a right to share is conferred can be ascertained.
The question as to who are those females entitled to such a share depends upon which of the cls.
(a) (b) or (c) applies to such a theoretical partition.
In the present case in view of the definition of a 'son ' in sub section
(3) the assumed partition would be between a 'lather and a son under el.
Under that clause the respondent would have no right to a share either as the wife of M or as the grandmother of the appellant.
The extended meaning given to the word 'mother ' in s.8(3) would include the grandmother of M and not of the appellant.
[138E G: 139A 0].
Venkatapathiah vs Saraswathana, , Narasimha Setty vs Nagamma, , Nagendradasa vs Ramakrishnan, , Dakshnaimurthy vs Subbamma, , Venkatachaliah vs Ramalingiah.
and Venkatagowda vs Sivanna, [1960] My. L.J. 85, referred to. |
Appeal No. 548 of 1967.
Appeal by special leave from the award dated October 5, 1966 ,of the Industrial Tribunal, Alleppey in Industrial Dispute No. 9 ,of 1965.
H. R. Gokhale and D. N. Gupta, for the appellant.
M. K. Ramamurthi, Shyamala Pappu, Vineet Kumar and R. Nagaratnam, for the respondents.
The Judgment of the Court was delivered by Mitter, J.
This appeal by the Remington Rand of India Ltd. :against their workmen arises out of an award dated 5th October, 1965 made by the Industrial Tribunal, Alleppey published in the Kerala Gazette dated 15th November, 1966.
The first point taken against this award is that it cannot be given effect to as it was published beyond the period fixed in the Act.
The notification accompanying the gazette publication stated that Government had received the award on 14th October, 1966.
It was argued by Mr. Gokbale that in terms of section 17(1) of the Industrial Disputes Act the award bad to be published " within a period of thirty days from the date of its receipt by the appropriate Government".
According to learned counsel, the award having reached Government on 14th October, 1966 it should have been published at the latest on 12th November, 1966 as section 17 of the Act was mandatory.
Our attention was also drawn to 165 sub section
(2) of section 17 according to which it is only the award published under sub section
(1) of section 17 that is final and cannot be called in question by any court in any manner.
We were also referred to section 17 A and section 19.
Under sub section
(1) of section 17 A an award becomes enforceable on the expiry of thirty days from the date of its publication under section 17 and under sub section
(3) of section 19 an award is to remain in operation for a period of one year from the date on which the award becomes enforceable under section 17 A. From all these provisions it was argued that the limits of time mentioned in the sections were mandatory and not directory and if an award was published beyond the period of thirty days, in contravention of section 17(1) it could not be given effect to.
To fortify his argument, learned counsel relied on certain observations of this Court in The Sirsilk Ltd. vs Government of Andhra Pradesh.(1) In that case, there was an order referring certain disputes between the appellant and its workmen to the Industrial Tribunal, Andhra Pradesh.
The Tribunal sent its award to Government in September 1957.
Before the Government could publish the award, the parties to the dispute came to a, settlement and on 1st October, 1957 a letter was written to the Government jointly on behalf of the employer and the employees intimating that the dispute which had been pending before the Tribunal had been settled and a, request was made to Government not to publish the award.
Government expressed its inability to withhold the publication taking the view that section 17 of the Act was mandatory.
The appellants filed writ petitions before the High Court of Andhra Pradesh under article 226 of the Constitution praying that Government might be directed not to publish the award sent to it by the Industrial Tribunal.
The High Court held that section 17 was mandatory and it was not open to Government to withhold publication.
The contention on behalf of the appellants was that section 17 providing for the publication of the award was directory and not mandatory.
Mr. Gokhale relied on the passage at page 452 of the judgment reading: "It is clear therefore, reading section 17 and section 17 A together, that the intention behind section 17(1) is that a duty is cast on Government to publish the award within thirty days of its receipt and the provision for its publication is mandatory and not merely directory".
Ultimately, however, on a conspectus of sections 17, 17 A, 18 and 19, it was observed that "though section 17(1) is mandatory and the Government is bound to publish the award received by it from an industrial tribunal, the situation arising in a case like the present is of an exceptional nature and requires a reconciliation between section 18(1) and section 18(3), and in such a situation, the only way to reconcile the two provisions is to withhold the publication of the award, as a binding settlement has.
already come into force. . " (1) ; , 452 166 Reference was also made to the case of Erumeli Estate vs Industrial Tribunal (1).
There the question directly arose as to whether non publication of the period mentioned in section 17 (1)invalidated the award and the learned Judge observed that he was not inclined to accept that contention although it was highly desirable that the award should be published within the time mentioned.
He said: "Exceptioning that a slight delay in publishing the award under section 17(1) results in postponing its finality under section 17 (2) or its becoming enforceable under section 17 A, no other consequence flows from the delay and therefore, in my view the provisions of sub s (1) of s 17 should be considered only to be merely directory. . ." Mr. Gokhale also referred us to the case of the State of Uttar Pradesh & Others vs Babu Ram Upadhya(2) where there is an elaborate discussion as to whether the use of the word "shall" in A Statute made the provision mandatory.
It was observed by Subba Rao, J. (as he then was) speaking for the majority of the Court that: "For ascertaining the real intention of the Legislature the Court may consider inter alia, the nature and the design of the statute, and the consequences which would follow from construing it One way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances, namely, that the statute provides for a contingency of the non compliance with the provisions, the fact that the noncompliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered.
" Keeping the above principles in mind, we cannot but hold that a provision as to time in section 17(1) is merely directory and not mandatory.
Section 17(1) makes it obligatory on the Government to publish the award.
The limit of time has been fixed as showing that the publication of the award ought not to be held up.
But the fixation of the period of 30 days mentioned therein does not mean that the publication beyond that time will render the award invalid.
It is not difficult to think of circumstances when the publication of the award within thirty days may not be possible.
For instance, there may be a strike in the press or there may be any other good and sufficient cause by reason of which the publication could not be made within thirty days.
If we were to hold that the award would therefore be rendered invalid, it would be attaching undue importance to a provision not in the mind of the legislature.
It is well (1) [1962] IT L.L.J. 144.
(2 ) [1961]2 S.C.R 679, 710 167 known that it very often takes a, long Period of time for the reference to be concluded and the award to be made.
If the award becomes invalid merely on the ground of publication after thirty days, it might entail a fresh reference with needless the parties.
The non publication of the award within the period of thirty days does not entail any penalty and this is another consideration which has to be kept in mind.
What was said in the earlier passage from the judgment in The Sirsilk Ltd. vs Government of Andhra Pradesh(1) merely shows that it was not open to Government to withhold publication but this Court never meant to lay down that the period of time fixed for publication was mandatory.
Coming to the merits of the case, Mr. Gokhale argued that the Tribunal.
had gone wrong in revising the wage scales as it had done.
The head of dispute referred to the Tribunal was "revision of wages as per award of the Madras Labour Tribunal in 38 of 1960.
" The arguments advanced in this case were the same as in the Bangalore case (just now disposed of) and the Tribunal after noting the phenomenal progress of the Company and the enormous profits it was making, came to the conclusion that there was no reason why there should be any disparity in wages between the employees of a branch and the regional office when they were doing the same or similar work.
In this case also, there was no evidence of comparable concerns.
In our view, what we have said on this point of the dispute with regard to the Bangalore branch applies equally with regard to the Kerala branch and the matter will have to go back to the Tribunal for fixing the wages and the adjustment of the workers in the revised scale in the light of the observations made in that case bearing in mind Mr. Gokhale 's offer on behalf of the Company to increase the wages as in the other appeal.
With regard to dearness allowance again, what was said in the Bangalore appeal applies equally to this appeal.
Here again the Tribunal said: "It is also an accepted fact that the cost of living both at Trivandrum and at Ernakulam is higher than the cost of living at Madras.
Therefore, there is no justification in perpetuating the disparity in the payment of D.A. to the workmen working at Madras and those working in the Trivandrum Branch.
" In the result, the Tribunal directed that the workmen of Ernakulam branch should get dearness allowance "at the rate at which and in the manner in which" the pay and dearness allowance was being paid to the employees of Madras Regional Office.
In our view, dearness allowance should be the same as decided in the case of the workers of the Bangalore branch.
(1) ; 168 The scheme for gratuity is the same as in the case of the Bangalore branch with the only difference that the maximum fixed was 20 months ' wages after 20 years service.
In our view, there is no reason why the scheme for gratuity should not be the same in the Ernakulam branch as in the Bangalore branch in case of termination of service for misconduct and the qualifying period should be 15 years ' service.
Again, on principles already formulated, we hold that leave facilities at Ernakulam should be the same as those prevailing at Madras.
Next comes the dispute with regard to the working hours.
The working hours of the employees of Trivandrum and Ernakulam as prevalent were from 9 a. m. to 1.
p. m. and from 2 p. m. to 5 30 p. m. on week days and from 9 a. m. to 1 p. m. on Saturdays.
At Madras the Company 's workers work only for five days in a week from 9 a. m. to 1 p. m. and 1 45 p. m. to 5 30 p.m.
The total working hours were therefore somewhat less than those at Trivandrum and Ernakulam.
The complaint of the union before the Tribunal was that although by circular dated 24th March 1963 the Company had fixed the working hours from 9.30 a.m. for clerks and 9 a.m. for mechanics and peons, it was extracting half an hour 's work per day extra contrary to their own orders.
The Tribunal held that the circular should be given effect to and that the clerical staff should work from 9.30 a.m. to 1 p.m. and from 2 p.m. to 5.30 p.m. on working days and from 9.30 a.m. to 1 p.m. on Saturdays.
We see no reason to disturb this portion of the award.
Another head of dispute related to work load.
The complaint of the union was that the workload was too heavy and that the method of calculation of workload was arbitrary.
According to them, the workload fixed by agreement between the Company and its employees in Delhi and Lucknow was seven machines per day or 150 machines per month, while the workload at Trivandrum was 10 machines per day.
According to the Management the workload fixed i.e., 10 machines per day, was not too much and there was no reason for disturbing the prevailing arrangement.
But the Management did not deny that during the course of negotiations they had agreed to reduce the workload to seven machines per day or 150 machines per month and the Tribunal adopted this in the award with a rider that "all the machines attended to, whether new or old, whether under the service contract or not, will be counted for the sake of workload".
No satisfactory reason has been adduced as to why we should disturb the award.
The last head of dispute was with regard to "moving staff allowance".
The union demanded that workmen who were deputed on tour on Company 's work should be given a day off if they had to travel two nights consecutively.
Demand was also made that, 169 travelling staff should be paid overtime for the work done on holidays while on tour at double the normal wages for the day.
The Management disputed this claim on the ground that it was not possible to calculate the number of hours worked by the employee at the out station while on tour.
The Tribunal found on examining a mechanic that the jurisdiction of the branch was limited to the districts Trivandrum, Quilon, Alleppey and Kottayam and even if he was forced to work on holidays he was given over time wages.
The Tribunal held that it was only just and reasonable that tour in mechanics should be given a day off if they travelled on two consecutive days for reaching a place of work and also over time wages at double the wages for the work done on holidays.
It appears to us that with the limitation as to jurisdiction noted above, the occasion for a mechanic spending two consecutive nights for reaching a place of work will arise very seldom, but if it does, there is no reason why he should not get overtime wages as awarded by the Tribunal and we see no reason to interfere with this portion of the award.
In the result, the matter will go back to the Tribunal for disposal of the issue as to the revision of wage scales and adjustment of workers in the revised scales.
The scheme for gratuity will stand modified as indicated in our judgment in Civil Appeal No. 2105 of 1966 delivered today.
The rest of the award will stand.
The appellant will pay the respondent the costs of this appeal.
A ward modified. | Section 17(1) of the , makes it obligatory on the appropriate Government to publish the award received by it from the Industrial Tribunal; but, the provision in the section as to time, that the Government shall publish it within a period of thirty days from the date of its receipt, is merely directory and not mandatory.
Therefore, where the Government received the award on 14th October 1966 and published it in the Gazette on the 15th November 1966, the award did not cease to be enforceable.
[166F G] Observations in The Sirsilk Ltd. vs Government of Andhra Pradesh, ; , 452, explained.
The State of Uttar Pradesh & Others vs Babu Ram Upadhya, ; , 710, followed.
Erumeli Estate V. Industrial Tribunal, [1962] II L.L.J. 144, referred to. |
Appeal No. 787 of 1964.
Appeal from the judgment and decree dated January 5, 1961 of the Calcutta High Court in Appeal from Appellate Decree No. 1012 of 1955.
A.K. Sen and D. N. Mukherjee, for the appellant.
Sukumar Ghose, for respondent No. 1.
The Judgment of WANCHOO, C. J. and MITTER, J. was delivered by MITTER, J. BHAGAVA, J. delivered a separate Opinion.
Mitter, J. This is an appeal by a certificate granted by the High Court at Calcutta from a judgment and decree in Second Appeal passed by that court in January, 1961.
The question before us is, whether the respondent No. 1 was entitled.
to the benefit of the Calcutta Thika Tenancy Act, 1949, as amended finally by an Act of 1953.
The facts necessary for the disposal.
of this appeal are as follows.
On the 18th June 1948, the plaintiff, the appellant before us, instituted Suit No. 292 of 1948 for ejectment of three Persons, namely, Abdul Rahim, Abdul Hamid and Abdul Gaffur, from the property in suit (a parcel of land about 1 cottah 8 chittaks being part of premises No. 6 / 1, Shibtola Lane, Entally, Calcutta).
In the notice to quit served on the 7th May, 1948 the first two persons were described as tenants under the plaintiff and the third as a person who had purported to purchase the structures on the land and the tenancy right therein.
In the plaint itself, the first two defendants were described as thika tenants.
No claim was made for rents or taxes although it was alleged that the same were in arrears.
The suit was contested only by the third defendant who filed a written statement in September 1948 contending that the suit was bad for non joinder of parties.
The suit was decreed by a Munsif of Sealdah court, 24 Parganas on March 18, 1949 after the Calcutta Thika Tenancy Act of 1949 had come into force on February 28, 1949.
The appeal filed therefrom by the third defendant was dismissed by the Subordinate Judge.
Fifth Additional 172 Court, Alipore on November 23, 1949.
The decree holder put the decree in execution and recovered possession of the land on December 18, 1949.
The Calcutta Thika Tenancy (Amendment Ordinance), 1952 was passed on October 21, 1952 introducing various changes in the Act and substituting a new definition of a thika tenant.
On March 14, 1953 the Calcutta Thika Tenancy (Amendment Act), 1953 was passed amending the definition of thika tenant still further and introducing important changes in the Act of 1949.
The effect of these provisions will be considered later on.
Before the Subordinate Judge, a point was taken that after the coming into force of the Act of 1949, the Rent Controller alone had jurisdiction in respect of ejectment suits as the defendant appellant was a thika tenant.
The Subordinate Judge dismissed the plea on the ground that the defendant appellant had not erected the structures on the land and was not a successor in interest of the tenant but only a transferee.
Abdul Gaffur preferred a Second Appeal to the High Court and this was heard and disposed of by a single Judge of that court on July 21, 1954, long after the Thika Tenancy Ordinance of 1952 and the Amending Act of 1953 had come into force.
The learned Judge held that at the time when the appeal of the defendant was disposed of by the Subordinate Judge, the rights of the parties were governed by the Thika Tenancy Act of 1949 and the definition of a thika tenant in that Act was not such as to afford any protection to the appellant.
In view of the amendment of the Act in 1953 however.
the learned Judge felt that the question whether the appellant was entitled to the benefit of that Act had to be re examined and consequently he remanded the matter to the lower appellate court with a direction that there should be a fresh decision of the case after considering the law applicable and taking further evidence if necessary.
On remand, the Subordinate Judge, Seventh Court, Alipore rejected the plea of the landlord that the appellant Gaffur could not be regarded as a thika tenant inter alia on the ground that he had sold his interest by a registered sale deed dated April 12, 1949 to one Subasini.
On a consideration of the provisions of the Act and the Ordinance, the Subordinate Judge held that the appellant, Gaffur, was not liable to ejectment in the absence of any grounds therefor in the notice to quit in accordance with section 3 of the Act as he was a thika tenant within the meaning of the Act as it was finally amended.
He also observed that section 4 of the Act would be applicable.
The landlord went up in appeal once more to the High Court.
On this occasion, the main plank of the argument on behalf of the landlord was that with the omission of section 29 civil courts became unable to remit ejectment suits to the controller with the result that the Act as finally amended could not apply to pre Act suits and thika tenants could get no relief under the Act.
The learned Judges of the Division Bench of the High Court found themselves unable to accept this argument and held that the only power vested in civil courts in respect of ejectment suits against 173 thika tenants like the present one was to be found in sections 28 and 29 of the original Act and by their omission from the statute "suits for eviction became infructuous before civil courts".
In the result, they dismissed the appeal.
We have now to trace the relevant changes in the law made from time to time and see whether the landlord was entitled to eject Abdul Gaffur notwithstanding the Act as amended from time to time.
The first attempt to give relief to persons described as thika tenants was made by West Bengal Ordinance No. XI of 1948 promulgated on October 26, 1948.
The Ordinance had only six sections.
Section 2 defined a thika tenant ' as meaning any person who under the system commonly known as "thika" "thika masik utbandi", "thika masik", "thika bastu", or under and other like system held land under another person whether under a written lease or otherwise and was, or but for a special contract would be, liable to pay rent at a monthly or any other periodical rate, for that land to such other person and had erected any structure on such land and was entitled to use it for residential purposes or for manufacturing or business purposes and included the suc cessors in interest of such person.
Section 3 Provided that notwithstanding anything contained in any other law for the time being in force, no decree or order for the ejectment of a thika tenant shall be executed during the continuance in operation of the Ordinance.
We need not consider the proviso to the section as we are not concerned with the condition mentioned therein.
It is to be noted that by the definition of thika tenant, a person could only get the protection of the Ordinance if he could establish that he was holding land under any of the systems expressly mention ed or any other like system.
A comprehensive Act was later passed i.e., West Bengal Act II of 1949 which, as already noted, came into force on Feb ruary 28, 1949.
The definition of a thika tenant was modified slightly but the change affected thereby need not be taken account of because the respondent Gaffur 's position was not improved thereby.
The incidents of thika tenancy were mentioned in various sections from section 3 to section II contained in Chapter 11 of the Act.
section 3 provided that notwithstanding anything contained in any other law for the time being in force or in any contract, a thika tenant shall, subject to the provisions of the Act, be liable to ejectment from his holding on one or more of the specified grounds and not otherwise.
The six grounds mentioned are: (i) failure to pay an arrear of rent due to the landlord in respect of the holding; (ii) user of the land comprised in the holding in a manner when rendered it unfit for any of the purposes mentioned in cl.
(5) of section 2 (the definition of a thika tenant) or violation of a condition consistent with the Act by a breach of which he was under the terms of a contract between himself and his landlord liable to be ejected; (iii) refusal to agree to pay rent at such enhanced rate as might be determined under section 25; (iv) requirement 174 of the land by the landlord for his own occupation or for the purpose of building on the land or otherwise developing the land except during any period limited by a registered lease under which the tenant might be holding; (v) failure on the part of the holding for his own residential, manufacturing or business purpose for more than six consecutive months (omitting the priviso); and (vi) on the expiry of a registered lease in favour of the tenant.
S 4 provided: "It shall not be competent for a landlord to eject any thika tenant from his holding unless the landlord has given the thika tenant notice in the manner provided in section 106 of the : (a) in the case where he wishes to eject the thika tenant on any of the grounds specified in clauses (i), (ii), (iii) and (iv) of section .1 at least one month 's notice in writing expiring with the end of a month of the tenancy; and (b) in the case where he wishes to eject the thika tenant on the ground specified in clause (iv) of section 3 at least three months ' notice in writing expiring with the end of a month of the tenancy.
" The section has two provisos one of which laid down that no thika tenant Shall be ejected from his holding on any of the grounds specified in cls. '(iv) and (v) of _. 3 except on payment to him or 0 deposit with the Controller for payment to him such compensations might be agreed upon 'or might be determined in ' 'the manner prescribed by"the Controller.
5 enacted that: "(1) Notwithstanding anything contained in any other law for the time being in force, a landlord wishing to eject a thika tenant on one or more of the grounds specified in section 3 shall apply in the prescribedmanner to the Controller for an order in that behalf and,on receipt of such application, the Controller shall after giving the thika tenant a notice to show cause within thirty days from the date of service of the notice why the application shall not be allowed and after making an inquiry in the prescribed manner either allow the application or reject it after recording the reasons for making such order. " The section further provided that no ' order allowing an application was to be made unlesscompensation payable to the tenant was either deposited with the Controller or paid to the tenant Chapter IV of the Act, by several sections, provided for appeals, reviews etc.
Under section 27 any person aggrieved by an order of the Controller might present an appeal in writing either to the Chief Judge of the Court of Small Causes in the Presidency town or to 175 the District Judge of a district in which the holding was situate.
Sub section
(5) of the section provided for reviews.
Section 28 enactect that: "Where any decree or order for the recovery of possession of any holding from a thika tenant has been made before the date of commencement of this Act but the ' possession of such holding has not been recovered from the thika tenant by the execution of such decree or order, the Court by.
which the decree or order was made may, if it is of opinion that the decree or order is not in conformity with any provision of this Act other than sub section (1) of section 5 or section 27, rescind or vary the decree or order in such manner as the Court may think fit for the purpose of giving effect to such provision and a decree or order so varied by any Court shall be transferred by such Court to the Controller for execution under this Act as if it were an order made under and in accordance with the, provisions of this Act".
Section 29 ran as follows: "The provisions of this Act shall apply to all suits and proceedings, including 'proceedings _ in execution, for ejectment of a thika tenant which are pending at the date of commencement of this Act, and if any such suit or proceeding relates to any matter in respect of which the Controller is competent after the date of such commendment to pass orders under this Act, such suit or proceeding shall be transferred to the Controller who shall on, suit transfer 'deal with it in accordance with the provisions of this Act as if this Act had been in operation on, the date of institution of the suit or proceeding: Provided that in applying the provisions of the Act to any suit or proceeding instituted for the ejectment of a thika tenant so transferred, the provisions regarding notice in section 4 of this Act shall not apply".
Section 33 provided that on the expiry of the Calcutta Thika Tenancy Ordinance, 1948, the provisions of section 8 of the Bengal General Clauses Act, 1899 would apply as if it were an enactment then repealed by a, West Bengal Act.
It will be noted from the provisions of the Act that it was intended to benefit all thika tenants expressly covered thereby.
Unfortunately, the Act did not afford any real protection to persons for whom it Was meant because of the peculiar definition of thika tenant in it.
A series of decisions of the Calcutta High Court shows that the tenants failed to get any relief because they could not prove any system either of the kind specifically mentioned in section 2 sub section
(5) or an other like system.
It is however 'clear that the benefit of section 28 was available only if the decree or order for the recovery of possession had been made before the date of the commencement of the Act but 176 possession of such holding had not been recovered from him.
Section 29 on the other hand was made applicable to all proceedings including proceedings in execution which were pending at the date of the commencement of the Act.
No exception was made under section 29 to cases where possession of the holding had been recovered from the thika tenant.
The consequence was that even if the tenant had lost possession but any proceeding even arising from an execution proceeding was pending, the provisions of the Act would be attracted.
If any such pending suit or proceeding related to any matter in respect of which the Controller was competent to pass orders, the suit or proceeding would be transferred to the Controller who would deal with it in accordance with the provisions of the Act just as if the Act had been in operation on the date of the commencement of the suit or proceeding.
The only qualification was that even if the suit had been filed before the Act but was riot disposed of by that date, the landlord had to establish that be was entitled to possession because of the existence of any of the grounds mentioned in section 3.
He was however not to be bound he could not have done because of the passing of the Act after the filing of his suit.
As already stated, the Act failed to achieve its object see Murari vs Prokash(1) and Mohammad Mateen vs Baijnath Bajoria.(2) To get over this difficulty, an Ordinance, namely, the Calcutta Thika Tenancy (Amendment) Ordinance, XV of 1952 was promulgated on October 21, 1952.
By section 2 of this Ordinance, the definition of thika tenant in the Calcutta Thika 'Tenancy Act, 1949 was substituted by a new one, namely: "(5) thika tenant ' means any person who holds, whether under a written lease or otherwise, land under another person, and is but for a special contract would be liable to pay rent, at a monthly or at any other periodical rate, for that land to that another person and has erected any structure on such land for a residential, manufacturing or business purpose and includes the successor in interest .of such person, but does not include a, person: (a) who holds such land under that another person in perpetuity; or (b) who holds such land under that another person under a registered lease, in which the duration of the lease is expressly stated to be for a period of not less than twelve years; or (c) who holds such land under that another person and uses or occupies such land as a khattal".
(1)A.I.R. 1950 Calcutta 230.
(2)A.T.R. 1951 Calcutta 358.
177 Other amendments were made in different sections of the Act.
The most important one was however that contained in section 5 sub section
(1) of this section which enatced that "Save as provided in sub section (2), the provisions of the said Act as amended by this Ordinance, shall apply to all cases pending before a Court or Controller on the date of the commencement of this Ordinance".
Sub section
(2) of section 5 provided as follows: "If, at any time between the commencement of the said , 'Act and of this Ordinance, a decree or order has been passed for the recovery of possession of any land and for other relief, if any, and delivery of possession has not been given, then on application made in this behalf by the person against whom the decree or order was passed, within three months of the commencement of this Ordinance, the Court which or the Controller who passed the decree or the order shall decide (after hearing the parties and after taking fresh evidence if necessary) whether the person is a thika tenant within the meaning of the said Act as amended by this Ordinance.
If the Court or Controller holds that the person is not such a thika tenant.
it or he shall dismiss the application.
If the Court or Controller holds that the person is such a thika tenant.
it or he shall set aside the decree or the order and annul the execution proceedings, if any, and (ii) where the proceedings are before a Court it shall remit the case to the Controller to be dealt with by him according to law.
(iii)where the proceedings are before the Controller he shall reopen the case and pass a new order".
Sub section
(4) provided that the provisions of this section would have effect notwithstanding anything to the contrary in any other law or elsewhere in the said Act as amended by the Ordinance.
The second Explanation to the section provided that the expression " court" would include a court exercising appellate or revisional jurisdiction and the expression 'controller ' meant the controller referred to in sub section
(2) of section 2 of the Calcutta Thika Tenancy Act, 1949 for the time being in force or the person deciding an appeal under section 27 of the Calcutta Thika Tenancy Act, 1949 for the time being in force as the case may be.
The effect of this was that a person who before the Ordinance would not come within the pale of the Act because he could not prove a system came within its protection because of the amendment of the definition of a thika tenant.
Sub section
(1) of section 5 made the Act, as amended by the Ordinance, applicable to all cases pending before a court or a controller.
This was irrespective of the question whether the suit had been filed before the Act or 178 after the Act, or whether a decree had been passed before the Act or thereafter.
Sub section
(2) of section 5 made a special provision for cases where a decree or order for possession had been made between the commencement of the Act and of the Ordinance and delivery of possession had not been given to the decree holder.
In such a case it became open to a person covered by the new definition of a thika tenant to make an application within three months of the commencement of the Ordinance either to the court or to the Controller as the case may be for relief on the basis that the applicant was a thika tenant.
Such an application could be made even if, the decree for ejectment had become final and order, for recovery of possession made but actual delivery of possession had not been given.
In such a case, if it was found that the person applying was a thika tenant, the court before whom the proceedings were pending had to remit the case to the controller and if the authority before whom the application was made was a controller, he had to re open the case and pass a new order.
If the matter was in appeal, the appellate court had to exercise jurisdiction under this sub section, determine whether the tenant was a thika tenant and send the matter to the controller 'if it was found that the tenant was entitled to the benefit of the Act '.
Even if no proceedings were pending in any court, it was open to the thika tenant to apply for relief provided delivery of possession had not been given.
Finally came the Thika Tenancy (Amendment) Act (VI of 1953).
It made important changes in the Act itself.
It came into force on March 14, 1953 on which date the Calcutta Thika Tenancy (Amendment) Ordinance, 1952 ceased to operate.
Sub section (2) of section 1 provided that the Act was to come into force immediately on the Calcutta Thika Tenancy (Amendment) Ordinance, 1952 ceasing to operate: provided that the provisions of the Calcutta Thika Tenancy Act, 1949 as amended by this Act were subject to the provisions of section 9 to apply and be deemed to have always applied to all suits, appeals and proceedings (a) before any court, or (b) before the Controller, or (c) before a person deciding an appeal under section 27 of the said Act, on the date of the commencement of the Calcutta Thika Tenancy (Amendment) Ordinance, 1952 i.e., 21st October, 1952.
Section 2 of the Act amended the definition of 'thika tenant ' still further by giving the benefit of the Act to persons who had erected or acquired by pur chase or gift any structure on the land for a residential, manufacturing or business purpose and was to include the successors in interest of such person.
The word 'successor in interest ' had not been defined in the Act or in the Ordinance but as words in the Act were under section 2 sub section
(6) to have the same meaning as those used in the and the Bengal Tenancy Act, 1885 it would, but for the amendment of the definition of a thika tenant, have meant only those persons who inherited from tenants and 179 not those who acquired by purchase.
Sections 3, 4 and 5 introduced changes with which we are not concerned, Section 8 laid down that sections 28 and 29 of the Act of 1949 shall be omitted.
Under section 9 any proceedings commenced under sub section
(2) of section 5 of the Calcutta Thika Tenancy (Amendment) Ordinance were to be continued as if such sub sections
(2), (3) and (4) of that section and the Explanation to that section were in force.
The net result seems to be that after the Amendment Act of 1953 came into force, the position of a tenant had to be examined in the light of the Act as it finally emerged.
Sub section
(2) of section 1 made the provisions of the Calcutta Thika Tenancy Act, 1949 as amended by the Act of 1953, applicable to all suits, appeals and proceedings pending on 21st October before any court or before the controller or before a person deciding an appeal under section 27 of the Act.
No reference is made in this subsection to the date when the suit was instituted.
Only suits which were pending on 21st October 1952 were to be decided in terms of the Act as finally amended.
The question therefore arises, whether a tenant could claim the benefit of the Act in a. pre Act suit.
It is a general principle of law that statutes are not to operate retrospectively so as to defeat vested rights, but such operation may be given by express enactment or by necessary implication from the language employed.
According to Craies on Statute Law (Sixth Edition) at p. 391: "If it is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the courts will give it such an operation".
The learned author points out at p. 397: "It is a well recognised rule that statutes should be interpreted, if possible, so as to respect vested rights, and such a construction should: never be adopted if the words are open to another construction. . .
For it is not to be presumed that interference with existing rights is intended by the, legislature, and if a statute be ambiguous the court should lean to the interpretation which would support existing rights.
" Again at page 398, the learned author states: "In the absence of anything in an Act to show that it is to have a retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a slaim in litigation at the time when the Act is passed, . .
Where, however, the necessary intendment of an Act is to affect pending causes of action, the Court will give effect to the intention of the legislature even though there is no express reference to pending actions".
180 Reference may be made to the case of Knight vs Lee(1) where Parke B. in his judgment, said: "It seems a strong thing to hold that the legislature could have meant that a party who under a contract made prior to the Act had as perfect title to recover a sum of money as he had to any of his personal property, should be totally deprived of it without compensation".
This was decided in terms of the Gaming Act, 1845, section 18 of which enacted that " no suit shall be brought or maintained for recovering any such sum of money " and the question was whether that enactment was retrospective so as to defeat an action already commenced.
The Gaming Act,1922 enacted that "no action for the recovery of money under the said section (section 2 of the Gaming Act, 1835) shall be entertained by any court".
In Headling vs Goll(1) it was held that the section was not retrospective and that the Act did not operate to put an end to pending actions.
According to Halsbury 's Laws of England, third edition, Vol. 36, page 413, article 627: "Unless it is clearly and unambiguously intended to do so, a statute should not be construed so as to interfere with or prejudice established private rights under contracts or the title to property or so as to deprive a man of his property without his having an opportunity of being heard".
The provisions of the Act of 1949 as finally amended by the Act of 1953 have to be examined to show how far they disturb the rights of landlord to recover possession of the property from a person who would be a thika tenant on 28th February, 1949.
Section 3 of the Act which cuts down the right of the landlord to recover possession except on the grounds therein specified musi be held to apply to all suits even though filed before 28th February 1949.
The language of the section leaves no room for doubt as to this.
It expressly states that notwithstanding anything contained in any other law for the time being in force or in any contract, a thika tenant shall be liable to ejectment on ground specified and not otherwise.
Consequently, a landlord who had filed a suit before the 28th October 1949 but was unable to ,establish any of the grounds mentioned in section 3 could not claim to eject his tenant.
But the provisions of sections 4 and 5 of the Act are not couched in the same kind of language as section 3.
The legislature clearly meant section 4 to be prospective because according to its language "the landlord who wishes to eject the thika tenant (1) (2) 39 Times Law Reporter 31. 181 must give at least one month 's notice in writing" or three months ' notice as the case may be.
A landlord who had already filed the suit before the Act had evinced his intention and the question of his wishing to eject the thika tenant afresh after the Act or giving a notice for the purpose did not arise.
Again section 5 lays down in clear terms that a "landlord wishing to eject a thika tenant" on one or more of the grounds specified in section 3 "shall apply in the prescribed manner to the controller".
This is only consistent with the wish of a landlord after the Act has come into force.
Before the Act had come into force, the landlord could not possibly know that his suit would be liable to be defeated unless he applied to the controller because there was no such authority functioning then.
The section shows clearly that when a landlord wished to eject a thika tenant after the Act had come into force, he had to consider whether any of the grounds in section 3 was available to him, and if so, he did not have to file a suit but apply to the controller for an order in that behalf.
The language of sections 4 and 5 leave no room for doubt that after the coming into force of the Act it was not open to the landlord to file a suit.
He could only make an application under section 5 after giving notice under section 4.
Sections 28 and 29 of the Act which were omitted as a result of the enactment of the Act of 1953 bring this out in clear terms.
Section 28 was meant to give relief to a thika tenant in a case where a decree or order for recovery of possession of any holding from a thika tenant had been made before the date of commencement of the Act.
It could not apply to the facts of a case like the present where the decree was made after the Act had come into force.
Section 29, on the other hand, shows that it was to be applicable to all suits and proceedings which were pending at the date of the commencement of the Act of 1949.
In other words, it was to apply to any suit or appeal or any proceeding in execution which was pending on 28th February, 1949.
In any such case, the suit or proceeding wherever it was pending had to be transferred to the controller.
The controller in his turn had to deal with the matter in accordance with the provisions of the Act of 1949 as if it had been in operation on the date of the institution of the suit or proceeding which might be before the commencement of the Act; but he was to deal with all pre Act suits on the basis that no notice under section 4 was necessary.
If the legislature did not want to impose the bar of section 4 to pre Act suits in 1949 it does not stand to reason that the legislature should seek to impose it in the year 1953 to be operative in all suits pending not on February 28, 1949 but on 21st October, 1952.
The logical conclusion is that the legislature always proceeded on the basis that section 4 was prospective.
The language of section 5 being closely similar to that used in section 4 that section should also be held to be prospective only.
182 We cannot speculate as to why the legislature thought fit to omit sections 28 and 29 from the Act of 1949.
The effect of omission of section 28 has been considered by this Court in Mahadeolal Kanodia vs Administrator General of West Bengal(1) where it was held that a thika tenant against whom proceedings for execution of the decree for eviction were pending and who had applied for relief under section 28 lost the protection of that section as a result of the Amending Act of 1953.
The effect of omission of section 29 is that we must measure the rights of the parties in the appeal before us on the 'basis that the section had never been on the statute book.
The situation which arises as a result thereof is that we must deal with the rights of the parties to a suit filed before the Act of 1949 was enacted in terms of such provisions as were clearly applicable thereto.
As Abdul Gaffur came under the definition of a thika tenant by the Amending Act of 1953 we have to proceed on the basis that he was such a tenant in 1949 with the result that he could claim the benefit of section 4 of the Act.
As already noted, sections 4 and 5 could not be made to apply to such a suit which in the view expressed, were prospective and not retrospective.
Consequently, the absence of a notice under section 4 would not stand in the way of the landlord nor could his suit be rejected on the ground that he had not applied to the controller.
There being no provision for transfer of the proceedings of the suit to the controller, the court had to apply the Act as it found applicable to the facts of the case.
It is open to the legislature to impose a bar or a qualification to the rights of the parties by the use of suitable words such as "notwithstanding any law to the contrary or in any agreement between the parties".
In such a case, a litigant desiring to have relief in a suit must show that the bar does not affect his case.
For instance, it is open to the legislature to enact that notwithstanding the rights which a landlord may have against a tenant under the ordinary law of the land, he shall not be entitled to eject the tenant unless he makes out a special ground for eviction, as has been done by section 3 in this case.
Most of the Rent Control Acts all over India contain similar provisions and courts have always held such provisions applicable to pending proceedings.
Whereas before the enactment of the Calcutta Thika Tenancy Act, 1949 it was not necessary for the landlord either to allege any of the grounds specified in section 3 or to prove the existence thereof at the hearing of the suit, he had to establish the existence of such a ground when the suit was heard.
The ground need not be specified in the plaint, but nevertheless it had to be established in the suit.
In this case, the learned Subordinate Judge, Seventh Court, Alipore who was directed by the remand order of the Calcutta High Court to take fresh evidence, if necessary, was not called upon by any of the parties to hear or record fresh evidence.
He however directed his attention to the (1) [1960]3 S.C.R. 578.
183 question as to whether the tenant appellant was entitled to press into service the provisions of sections 3 and 4 of the Act.
According to him both these sections would apply to the facts of this case.
The learned Subordinate Judge seems to have been of the opinion that it was necessary to state some ground under section 3 on the basis of which the landlord wanted to eject the tenant.
Referring to the notice of ejectment served in this case, he said: "Not any one of the grounds as enumerated in section 3 was called in aid or could be called in aid".
He was not right in his view that the grounds specified in section 3 could not be called in aid.
Section 3 does not purport to lay down that the grounds mentioned therein had got to be stated in the notice of ejectment.
All that the section lays down is that ejectment could not be had unless the existence of one of the grounds was proved.
Such proof could have been adduced at the trial even if no mention of the grounds had been made before.
As section 4 of the Act was prospective only, it could not apply to this case.
The decision of the Subordinate Judge is however right inasmuch as the landlord made no attempt to establish any of the grounds for eviction mentioned in section 3.
The decision of the High Court, when the matter was heard for the second time must be upheld on that ground.
However, the. view expressed by the Calcutta High Court finally hearing the appeal that suits for eviction of thika tenants became infructuous before civil courts after the omission of section 29 is not correct.
The correct view is that sections 4 and 5 being prospective and as such inapplicable to pre Act suits, the landlord had to establish the existence of one of the grounds specified in section 3 in order to succeed.
There being no provision for transfer of pending suits and appeals, the court hearing the appeal would have to pass a decree for ejectment even if the defendant was a thika tenant after taking into account section 3.
The tenant could not however ask for any compensation for the structures but could only remove them in terms of section 108(h) of the Transfer of Proper ty Act.
For reasons we cannot speculate upon, the legislature limited the applicability of the Act only to suits and appeals pending on 21st October 1952 and not in February, 1949 i.e. the date of the commencement of the Act of 1949.
It may be because before the Ordinance of 1952 no one could establish his rights as a thika tenant in view of the vague definition of "thika tenant" in the Act of 1949 which led to the decisions of the Calcutta High Court against persons who sought to establish their rights as such.
The legislature cannot be taken to have imposed a ban on all pre Act suits by the circuitous process of sections 4 and 5 of the Act.
It could then have said in clear terms that all pre Act suits shall be stayed.
Clearly that never was the intention of the legislature as section 29 of the Act of 1949 amply demonstrates.
In the result, as the landlord has not established any of the grounds specified in section 3 entitling him to ejectment, the appeal 184 must be dismissed.
On the special facts of the case, we make no order as to costs.
Bhargava, J. I agree with the judgment of my brother, Mitter, J. with the exception that I would like to reserve my opinion on the question whether section 4 of the Calcutta Thika Tenancy Act, 1949, as amended up to 1953, is prospective or not.
On the view that this appeal must be dismissed because the respondent was entitled to the benefit of section 3, it does not appear to me to be necessary to express any opinion on whether compliance with section 4 was also required, or whether it being prospective only no such compliance by the appellant was needed. | In June 1948 the appellant instituted a suit against the first respondent and others for their ejectment from the property in suit, On February 28, 1949 the Calcutta Thika Tenancy Act came into force.
The first respondent was not a thika tenant within the definition therefore of given in the Act.
The suit was decreed by the Munsif in March 1949.
In November 1949 the appeal filed by the first respondent was ,dismissed by the first appellate court.
He then filed a second ,,appeal in the High Court which was heard in 1954.
Before that the Calcutta Thika Tenancy (Amendment) Act, 1953 was passed.
Under this Act the first respondent came within the definition of thika tenant.
The High Court remanded the case to the Subordinate Judge for trying the case in the light of the amended Act.
The Subordinate Judge held that the first respondent was a thika tenant and could not be ejected as none of the grounds mentioned in section 3 of the Act had been established by the appellant.
The latter appealed to the High Court and urged that with the omission of section 29 in the 1953 Act Civil Courts became, unable to remit ejectment suits to the Rent Controller with the result that the Act as amended could not apply to pre Act suits.
The High Court however took the view that after the omission of sections 28 and 29 from the Act suits for eviction before civil courts became infructuous and, accordingly, dismissed the appeal.
The appellant with certificate came to this Court.
The questions that fell for consideration were: (i) whether the tenant could take the benefit of section 3 in a pre Act suit, (ii) whether in view of the omission of sections 28 and 29 from the Act the civil courts had jurisdiction to try such a suit.
HELD:Per Wanchoo C.J. & Mitter J. (i) While it is a general principle of law that statutes are not to operate retrospectively so as to defeat vested interests; such operation may be given by express enactment or by necessary implication from the language employed.
The language of section 3 leaves no room for doubt that it is retrospective since it expressly states that notwithstanding anything contained in any other law for the time being in force or in any contract, a thika tenant will be liable to ejectment on grounds specified therein and not otherwise.
[179 D E; 180 F G].
Knight vs Lee, and Beadling vs Goll, 39 Times Law Reporter 31, referred to.
Section 3 does not purport to lay down that the grounds mentioned therein have got to be stated in the notice of ejectment.
All that the section lays down is that ejectment could not be had unless the ,existence of one of the grounds was proved.
Such proof could have been adduced at the trial even if no mention of the grounds had been made before.
The appellant not having given such proof the case was rightly decided against him.
[183 C D].
171 (ii) However In a pre Act suit no notice under section 4 could be insisted on as that section , clearly prospective.
Section 5 which required proceedings to be filed before the Controller was also clearly prospective.
[180 H; 181 A; B H].
(iii) The High Court was wrong in holding, that suits for the eviction of thika tenants became infructious before civil courts after the omission of sections 28 and 29.
There being no longer any provision for transfer of pending suits and appeals, the court hearing the appeal would have to pass a decree for ejectment even if the defendant was a thika tenant after taking into account section 3.
[183 D F].
Per Bhargava, J. This appeal must be dismissed because the respondent was entitled to the benefit of section 3.
It was not necessary to express any opinion whether compliance With section 4 was also required or whether it being prospective only no such compliance by the appellant was needed.
[184 B]. |
ition (Crl.) No. 648 of 1987 etc.
(Under Article 32 of the Constitution of India) D.S. Tewatia, Mukul Mudgal, Rakesh Khanna, P.K. Jain, R.P. Singh, C.V.S. Rao, Prem Malhotra, S.K. Sabharwal, Mahabir Singh, Mrs. Urmila Kapoor and N. Sudhakaran for the appearing parties.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
These are a batch of writ petitions under Article 32 of the Constitution raising the common claim of entitlement to the benefit of Section 5 of the Punjab Borstal Act, 1926.
In each of these writ petitions, the petitioner has been convicted for the offence punishable under Section 302 of the Indian Penal Code and has been sentenced to life imprisonment.
The State of Haryana has challenged the claim of the petitioner in each of these writ petitions.
Learned counsel for the petitioners has relied upon the decision of this Court in Hava Singh vs State of Haryana & Anr., [1987] 4 SCC 207 in support of the claim advanced in the writ petitions.
A two Judge Bench of this Court in that case referred to Section 5 of the Act and E held: "On a conspectus of the aforesaid decision as well as on a consideration of the facts and circumstances the only conclusion follows that the petitioner who has already undergone actual imprisonment for seven years is entitled to be released from detention and from imprisonment.
Paragraph 516 B of the Punjab Jail Manual is not applicable in this case as the petitioner who was an adolescent convict below twenty one years of age was sent to the Borstal Institute at Hissar for detention in accordance with the provisions of Section 5 of the Punjab Borstal Act, 1926.
He being convicted by the Sessions Judge the maximum period of detention as prescribed by the Act is seven years.
We have already said hereinbefore that such an inmate of the Borstal Institute cannot be transferred to jail on the ground that he has attained the age of twenty one years as the said Act does not provide for the same.
The only provision for transfer to jail is in the case of incorrigible inmate or inmates convicted of major Borstal Institution offence.
" PG NO 143 Reliance was also placed by learned counsel for the petitioners on another two Judge Bench decision of this Court in the case of State of Andhra Pradesh vs Vallabhapuram Ravi; , That was a case under the Andhra Pradesh Borstal Schools Act, 1925 (5 of 1926) and the question for consideration was the same as here with reference to the provision of Section 8 of that Act.
The two Judge Bench held that the provisions of the Borstal Schools Act applied to the offence punishable under Section 302 of the Indian Penal Code.
Both these cases were referred to in Subhash Chand vs State of Haryana & Ors., ; by a three Judge Bench.
It referred to Hava Singh 's case (supra) at length.
The three Judge Bench in its judgment referred to the definition of 'offence ' under Section 2(4) of the Punjab Borstal Act which defined 'offence ' to mean "an offence punishable with transportation or rigorous imprisonment under the Indian Penal Code other than (a) an offence punishable with death;" The Court found that Section 302 of the Indian Penal Code provides: "whoever commits murder shall be punished with death, or imprisonment for life, and shall also be liable to fine" and proceeded to say again "one of the punishments for the offence of murder to death and, therefore, the offence of murder would be covered within Section 2(4)(i)(a) of the Punjab Act and to such a conviction the Punjab Borstal Act would have no application.
Support for such a view is available from several decisions of different High Courts".
The Court ultimately held: "In Hava Singh 's case the definition was not placed for consideration before the Court and, therefore, the conclusion which has been reached is not correct.
The Punjab Borstal Act does not have application to an offence punishable under Section 302 of IPC".
This being a decision of a larger Bench we are bound by it.
PG NO 144 In the Webster '6 Third New International Dictionary the follow ing meaning has been given to the word 'punishable ' "Deserving of, or liable to, punishment: capable of being punished by law or right".
Aiyar 's the Law Lexicon (Reprint Edition 1987) gives the meaning of 'punishable ' thus: "The word 'punishable ' as used in statutes which declare that certain offences are punishable in a certain way, means liable to be punished in the way designated.
" In Bouvier 's Law Dictionary, the meaning of the word 'punishable ' has been given as 'liable to punishment '.
In 'Words and Phrases Permanent Edition ', the following meaning has been given: "The word 'punishable ' in a statute stating that a crime is punishable by a designated penalty or term of years in the state prison limits the penalty or term of years to the amount or term of years stated in the statute.
" The word 'punishable ' is ordinarily defined as deserving of or capable or liable to Punishment, punishable within statute providing that defendant may have ten peremptory challenges if offence charged is 'punishable ' with death or by life imprisonment; means deserving of or liable to punishment; capable of being punished by law or right, may be punished, or liable to be punished, and not must be punished. 'Corpus Juris Secundum gives the meaning as: 'Deserving of, or liable to, punishment; capable of being punished by law or right; said of persons of offences.
The meaning of the term is not 'must be punished ', but 'may be punished ', or 'liable to be punished '.
In the absence of a definition of 'punishable ' we have referred to these for gathering the exact meaning of the word.
In the sense given to the word, as above, there can be no doubt that the offence of murder is punishable with death even though the punishment awarded is not death but imprisonment for life.
PG NO 145 An earlier decision of this Court in Kunwar Bahadur & Ors.
vs State of Uttar Pradesh, [1980] Supp.
SCC 339, where a two Judge Bench dealt with the provisions of the United Provinces Borstal Act 7 of 1938 was also relied upon.
The judgment is a short one.
Detailed reference to the provisions of the United Provinces Act has not been made but Section 7 of the Act was referred to and it was observed: "Under this Section where a prisoner is sentenced for transportation i.e. life imprisonment and is below the age of 21 years he should be sent to Borstal School where he cannot be detained for more than five years, The law thus contemplates that for such an offender the sentence of five years will be equivalent even to a higher sentence of life prisonment".
Obviously in the United Provinces Act, there is no definition of 'offence ' as available in the Punjab Act.
Therefore, the decision in Kunwar Bahadur 's case (supra) is not really material for our purpose. 'Punishable ' carries a meaning 'liable to be punished ' as indicated by the three Judge Bench.
Since the offence under Section 302 is punishable with death, the provisions of the Punjab Borstal Act would not cover an offence under Section 302 of IPC and the benefit would not therefore, be available to an accused convicted for the offence under Section 302 IPC.
During the hearing of the matters learned counsel for the petitioners had maintained that the provisions of the Punjab Act should be suitably amended to bring about uniformity in the law on the subject.
This is a matter for the State and the Legislature and it is for them to consider whether the provision should be suitably amended keeping the modern concept of punishment and treatment of adolescents in view.
Each of the writ petitions is dismissed.
There would be no order for costs P.S.S. Petitions dismissed . | The petitioners who have been convicted for the offence punishable under section 302 of the Indian Penal Code and have been sentenced to life imprisonment, claim entitlement to the benefit of section 5 of the Act.
Dismissing the writ petitions, HELD: The Punjab Borstal Act, 1926 does not have application to an offence punishable under section 302 of the Indian Penal Code.
[143G] The offence of murder is punishable with death even though the punishment awarded is not death but imprisonment for life.
[144H] 'Punishable ' in section 2(4) of the Act carries a meaning 'liable to be punished '.
Since the offence under section 302 is punishable with death, the provisions of the Punjab Borstal Act would not cover an offence under section 302 of I.P.C. and the benefit would not, therefore, be available to an accused convicted for the offence under section 302 I.P.C. [145E] Subhash Chand vs State of Haryana & Ors., ; applied; Hava Singh vs State of Haryana & Anr., [1987] 4 SCC 207; State of Andhra Pradesh vs Vallabhapuram Ravi, ; and Kunwar Bahadur & Ors.
vs State of Uttar Pradesh, [1980] (Supp.) SCC 339, distinguished.
PG NO 141 PG NO 142 |
Appeal No. 21 of 1965.
Appeal by special leave from the judgment and decree dated March 15, 1961 of the Allahabad High Court in Second Appeal No. 2434 of 1960.
N.C. Chatterjee, E. C. Agarwala, Kartar Singh and P.C. Agarwala, for the appellants.
J. P. Goyal and B. P. Jha, for the respondents.
477 The Judgment of the Court was delivered by Shah, J.
Hukam Singh and Sukhram the first appellant in this appeal were two brothers.
Chidda the second appellant, is the son of Sukhram, Hukam Singh, Sukhram and Chidda consti tuted a Hindu joint family and were governed by the Mitakshara Law of the Benares School.
Hukam Singh died in 1952 leaving him surviving his wife Kishan Devi.
On December 15, 1956, Kishan Devi sold a half share in a house and a shop belonging to the joint family, to Gauri Shankar.
Sukhram and his son Chidda then commenced an action in the Court of the Munsif of Ghaziabad for a decree declaring that the sale by Kishan Devi to Gauri Shankar was without consideration, and for an order cancelling the sale deed.
The suit was dismissed by the Court of First Instance, the District Court, Meerut, and the High Court of Allahabad.
In this appeal the only question which falls to be determined is whether the sale deed executed by Kishan Devi was binding upon the coparceners of her husband.
On the death of Hukam Singh in 1952, it is common ground Kishan Devi acquired by virtue of section 3(2) of the Hindu Women 's Right to Property Act 18 of 1937, the same interest in the property of the joint family which Hukam Singh had.
That interest was limited interest known as the 'Hindu, Woman 's estate ': section 3(3) of the Hindu Women 's Right to Property Act, 1937.
The Parliament enacted The 30 of 1956, which by section 14(1) provided that "Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.
" The plea raised in the District Court that Kishan Devi was not "possessed" of the property which she sold to Gauri Shankar was rejected, and has not been set up before us.
Clearly therefore, on the express words of section 14(1) of the , Kishan Devi acquired on June 17, 1956, rights of full ownership in the interest which Hukam Singh had in the property of the family during his life time, and she was competent without the consent of the male members of the family to sell the property for her own purposes.
But Mr. Chatterjee for the appellants submits that under the Benares School of the Mitakshara a male coparcener is not entitled to alienate even for value his undivided interest in coparcenary property without the consent of the other coparceners, unless the alienation be for legal necessity, or if the coparcener is the father, for payment by him of his antecedent debts which are not illegal or avvavaharika, and it could not have been intended by Parliament to confer upon a widow in a Hindu family a larger right than the right which the surviving coparceners could exercise at the date of the sale by the widow.
Counsel says that the Parliament by Act 30 478 of 1956 merely intended to confer upon a Hindu widow rights of full ownership in the interest in property in which she had prior to that Act, only a limited interest, but did not intend to destroy the essential character of joint family property so as to invest the widow with power to alienate that interest without the assent of the coparceners of her husband.
It is true that under the Benares school of the Mitakshara a caparcener may not, without the consent of the other coparceners, sell his undivided share in the family estate for his own benefit: Madho Parshad vs Mehrban Singh(1); Balgobind Das vs Narain Lal and Ors.
(2) and Chandradeo.
Singh & Ors.
vs Mata Prasad & Anr.
(3) But the words of section 14 of the are express and explicit; thereby a female Hindu possessed of property whether ac quired before or after the commencement of the Act holds it as full owner and not as a limited owner.
The interest to which Kishan Devi became entitled on the death of her husband under section 3(2) of the Hindu Women 's Right to Property Act, 1937, in the property of the joint family is indisputably her "property" within the meaning of section 14 of Act 30 of 1956, and when she became "full owner" of that property she acquired a right unlimited in point of user and duration and uninhibited in point of disposition.
We are unable to agree with Mr. Chatterjee that restrictions on the right of the male members of a Hindu joint family form the bed rock on which the law relating to joint family property under the Hindu Law is founded.
Under the Law of the Mitakshara as administered in the territory governed by the Maharashtra and the Madras Schools and even in the State of Madhya Pradesh, a Hindu coparcener is competent to alienate for value his undivided interest in the entire joint family property or any specific property without the assent of his coparceners.
A male member of a Hindu family governed by the Benaras School of Hindu Law is undoubtedly subject to restrictions qua alienation of his interest in the joint family property but a widow acquiring an interest in that property by virtue of the is not subject to any such restrictions.
That is however not a ground for importing limitations which the Parliament has not chosen to impose.
On the death of her husband, Kishan Devi became entitled to the same interest which Hukam Singh had in the joint family property of that interest, she became full owner on June 17, 1956, and being full owner she was competent to sell that interest for her own purposes, without the consent of the male coparceners of her husband.
The appeal therefore fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) L.R. 17 I.A. 194.
(2) L.R. 20 I.A. 116.
(3) I.L.R. 31 All.
176 (F.B.). | The first appellant, his brother H and his son the second appellant, constituted a Hindu Joint family and were governed by the Mitakshara law of the Benares School.
He died in 1952 leaving him surviving his widow.
On December 15, 1956, the widow sold a half share in a house and a shop belonging to the joint family to the first respondent.
The appellants filed a suit for a decree declaring that the sale by the widow was without consideration and for an order can celling the sale deed.
The suit was dismissed by the Trial Court and, in appeal, by the High Court.
In appeal to this Court it was contended on behalf of the appellants that under the Benares School of the Mitakshara, a male coparcener is not entitled to alienate even for value, his undivided interest in coparcenary property without the consent of the other coparceners except in certain specified cases, and by section 14(1) of the Hindu Succession Act 30 of 1956 it could not have been intended to confer a larger right on the widow of a coparcener.
HELD: On the death of her husband, the widow became entitled to the same interest which H had in the joint family property under s.3(2) of the Hindu Women 's Right to Property Act, 18 of 1937, in the joint family property of that interest, by virtue of s.14(1) of the , she became full owner on June 17, 1956 and being full owner she was competent to sell it for her own purpose without the consent of the male coparceners of her husband.
[477D G] A male member of a Hindu family governed by the.
Benares School of Hindu Law is undoubtedly subject to restrictions qua alienation of his interest in the joint family property.
but a widow acquiring an interest in that property by virtue of the is not subject to any such restrictions.
That is however not a ground for importing limitations which the Parliament has not chosen to impose.
[478F] Madho Parshad vs Mehrban Singh, L.R. 17 I.A. 194; Balgobind Das vs Narain Lal and Ors.
L.R. 20 I.A. 116 and Chandradeo Singh & Ors.
vs Mata Prasad & Anr.
T.L.R. 31 All.
176 (F.B.); referred to. |
Appeals Nos.
1968 1970 of 1966.
Appeals by special leave from the judgment and order dated July 16, 1962 of the Madras High Court in Tax Cases Nos. 117,118 and 119 of 1959.
section B. Banerjee and section N. Mukerjee, for the appellant (in all the appeals).
K. M. Mudaliyar, Advocate General for the State of Madras and A. V. Rangam, for the respondent (in all the appeals).
M.C. Setalvad, B. Sen, G. section Chatterjee and P. K. Bose, for the Intervener (in C. A. No. 1968 of 1966).
The Judgment of the Court was delivered by Hegde, J.
These appeals by special leave arise from the common order made by the Madras High Court in T. C. Nos.
117 to 119 (revisions Nos. 71 to 73) on its file.
The Indian Steel and Wire Products Ltd. a joint stock public limited company is the appellant in all these appeals.
At the instance of the steel controller the appellant supplied certain steel products to various persons in the Madras State during the financial years 1953 54, 1954 55) and part of 1955 56 (from April 1, 1955 to September 6, 1955).
The State of Madras assessed the turnovers of the appellant relating to those transactions to sales tax under the Madras Gen. Sales Tax Act, 1939 (Madras Act 9 of 1939) (to be hereinafter referred to as the Act), the law in force at that time.
The appellant has been assessed to tax on the basis of best judgment.
The authorities under the Act have determined appellant 's turnover during the year 1953 54 at Rs. 3129520/ and levied a tax of Rs. 16298/4 annas.
During the financial year 1954 55, its turnover was determined at Rs. 3759216/ .
and the assessment levied is Rs. 58737 12 0.
For the broken period in the financial year 1955 56, the appellant 's turnover was determined at Rs. 1453292/ and the same was assessed to tax at Rs. 22707 12 0.
Even according to the appellant, its turnovers during 1953 54 was Rs. 2912533 14 0, in 1954 55, Rs. 3971493/7/ and in 1955 56, Rs. 1725400/5/ .
Therefore, there is little room for controversy about its turnover in the relevant years.
The appellant is contesting the right of the State of Madras to levy tax on the turnovers in question.
According to the appellant, the turnovers in question could not have been considered as sales and consequently they could not have been brought to tax under the Act.
The appellant asserts that deliveries in question were made under compulsion of law and there was no agreement between the parties.
They were 481 made in pursuance of the orders of the Controller exercising powers under the Iron & Steel (Control of Production and Distribution) Order, 1941 (which will hereinafter be referred to as the order), which was issued under the Defence of India Act 1939.
It was argued on behalf of the appellant that it was the controller who determined the persons to whom the goods were to be supplied, the price at which they were to be supplied, the manner in which they were.
to be transported, and the mode in which the payment of the price was to be made.
In short, it was said that every facet of those transactions were prescribed by the controller and therefore those transactions cannot be considered as sales.
On the basis of those assertions support was sought from the decision of the House of Lords in Kirkness vs John Hudson & Co., Ltd.(1) the decision of this Court in M Is.
New India Sugar Mills Ltd. vs Commis sioner of Sales Tax.
Bihar(1), the decision of the Calcutta High Court in Calcutta Electric Supply Corporation Ltd. vs Commissioner of Income Tax, West Bengal(1) the decision of the Orissa High Court in Messrs. Cement Ltd. vs The State of Orissa(1), and a few other decisions.
It was further argued that even if those transactions are considered as sales the State before exercising its taxing power should have had in its possession material to show that the goods delivered by the appellant were delivered in that State for consumption which circumstance alone can make those transactions sales within that State; as no material was placed on record to show that the goods in question were delivered in that State for consumption it could not have brought the turnovers in respect of those transactions to tax under the Act.
These contentions of the appellant have been rejected by the authorities under the Act as well as by the High Court.
Other contentions advanced on behalf of the appellant deserve to be summarily rejected for the reasons to be mentioned hereinafter.
The principal question that falls for decision in these appeals.
is whether the transactions with which we are concerned herein are sales.
2(h) of the Act defines 'sale ' thus: " 'Sale ' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, and includes also transfer of property in goods involved in the execution of works contract and in the, supply or distribution of goods by a co operative society. club, firm or any association to its members for cash or for deferred payment or other valuable consideration but does not include a mortgage.
hypothecation, charge or pledge" (the explanations to that definition are not relevant for our present purpo se).
(1) (2) [1963] Suppl.
2 S.C.R. 459.
(3) (4) 12 S.T.C. 205.
482 This wide definition undoubtedly covers those transactions.
But then the power of a State to tax sales is derived from Entry 54 of List II of the VII Schedule in the Constitution.
That entry as it stood at the relevant time empowered the State to tax on the sale or purchase of goods.
The scope of the expression 'sale or purchase of goods ' found in entry 48 in List II of Schedule VII of the Government of India Act 1935 which is in pari materia with the aforementioned entry 54 came up for interpretation before this Court in State of Madras vs Gannon Dunkerley(1).
In that case, the question that fell for decision was whether the words 'sale of goods ' should be given their popular meaning or whether they should have the meaning attached to them under the Sale of Goods Act.
This Court held that the expression 'sale of goods ' was, at the time when the Government of India Act, 1935 was enacted, a term of well recognised legal import in the general law relating to sale of goods and in the legislative practice relating to that topic and must be interpreted as having the same meaning as in the sale of Goods Act 1930: In the course of the judgment, Venkatarama Aiyar, J,who ,spoke for the Court after examining the various decisions cited at the Bar, observed, as follows: "Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods which of course pre supposes capacity to contract, that it must be supported by money consideration and that as a result of the transaction property must actually pass in the goods.
Unless all these elements are present, there can be no sale.
Thus, if merely title to the goods passes but not as a result of any contract between the parties, express or implied, there is no sale.
So also if the consideration for the transfer was not money but other valuable consideration, it may then be exchange or barter but not sale.
And if under the contract of sale, title to the goods has not passed, then there is an agreement to sell and not a completed sale.
" As laid down by this decision, to constitute a valid sale, there must be concurrence of the following elements viz. (1) parties competent to contract (2) mutual assent (3) a thing the absolute or general property in which is transferred from the seller to the buyer and (4) a price in money paid or promised.
Therefore we have to see whether all these elements are found in the transactions before us.
Before doing so it is necessary to refer to the 'order ' and the manner in which those transactions were effected.
During the World War IT iron and steel goods became scarce.
Therefore it became necessary for the Government to control the production and distribution of those goods.
In order to do so, the (1) ; 483 government issued the 'order ' on July 26, 1941, and the same came into force on August 1, 1941.
The provisions in that order which are material for our present purpose are set out hereinbelow: "2. Definitions In this Order, unless there is anything repugnant in the subject context: (a) 'Controller ' means the person appointed as Iron and Steel Controller by the Central Government, and includes any person exercising, upon authorisation by the Central Government, all or any of the powers of the Iron and Steel Controller; (b) 'Producer ' means a person carrying on the business of manufacturing iron or steel.
(c) 'Registered Producer ' means a producer who is registered as such by the Controller.
(d) 'Stockholder ' means a person holding stocks of Iron or Steel for sale who is registered as stockholder by the Controller.
(e) 'Controlled Stockholder ' means a stockholder appointed by the Controller to hold stocks of iron or steel under such terms and conditions as he may prescribe from time to time.
(f) 'Pressure Pipes ' include all Pipes and Tubes 1/8" nominal bore and above which will withstand or may be used for a working pressure of 25 lbs.
per square inch and above.
Application of Order (I) The provisions of this Order shall apply to all iron or steel of the categories specified in the Second Schedule to this Order.
(2) A certificate signed by the Comptroller or by any officer authorised by him in this behalf, in respect of any category of iron or steel, shall be conclusive proof that it is an article to which this Order is applicable.
Acquisition No person shall acquire or agree to acquire any iron or steel from a Producer or a Stockholder except under the authority of and in accordance with the conditions contained or incorporate d in a general or special written order of the controller.
Disposal No Producer or Stockholder shall dispose of or agree to dispose of or export or agree to export from British India any iron or steel, except in accordance with the conditions contained or incorporated in a general or special written order of the Controller.
10B. Power to direct sale The Controller may ' by a written Order require any person holding stock or iron 484 and steel, acquired by him otherwise than in accordance with the provisions of Clause 4 to sell the whole or any part of the stock to such person or class of persons and on such terms and conditions as may.
be specified in the Order.
10C. Power to prohibit removal The Controller may order any producer (including a registered producer), any stockholder (including a controlled stockholder) or any other person not to remove or permit the removal of any iron or steel, whether sold or unsold, from his stockyard or from any other part of his premises to any place outside the precincts of such stockyard or premises, except with the written permission of the Controller.
11 AA (3).
No producer, stockholder, or other person holding stocks of iron and steel shall without sufficient cause, refused to sell any iron or steel which he is autho rised to sell under this Order.
Explanation The possibility or expectation of obtaining a higher price at a later date shall not be deemed to be a sufficient cause for the purpose of this clause.
11B. Power to fix prices (1) The Controller may from time to time by notification in the Gazette of India fix the maximum prices at which any iron or steel may be sold (a) by a Producer, (b) by Stockholder including a Controlled Stockholder and (c) by any other person or class of persons.
Such price or prices may differ for iron and steel obtainable from different sources and may include allowances for contribution to and payment from equalising freight, the concession rates payable to each pro ducer or class of producer under agreements entered into by the Controller with the producers from time to time.
and any other disadvantages.
(2) For the purpose of applying the prices notified under sub clause (1) the Controller may himself classify any iron and steel and may, if no appropriate price has been so notified, fix such price as he considers appropriate.
(3)No producer or stockholder or other person shall sell, or offer to sell.
(and no person shall acquire) any iron or steel at a price exceeding the maximum prices fixed under sub clause (1) or (2).
Any Court trying a contravention of this Order may, without prejudice to any other sentence which it may pass, direct that any Iron and Steel in respect of which the Court is satisfied that this order has been contravened shall be forfeited to His Majesty.
" The appellant has set out in para 4 of the statement of the case the procedure adopted for acquiring iron and/ 485 or steel products under the order.
This is what is stated therein: "That Order was at all material times administered principally by the Iron and Steel Controller having his office in the city of Calcutta in the State of West Bengal who controlled the entire production and distribution of the iron and/or steel products.
Any party desiring to acquire any product has to apply to the Controller.
Upon processing such application or requisition entirely at his option and discretion, the Controller would pass such a requisition an to the Appellant for manufacture and/or despatch.
The appellant has, upon receipt of the said requisition from the Controller to prepare a Works Order for the manufacture of the products concerned and to advise the Controller; and later on completion of the manufacture the appellant has to make the product conform to the requisition processed by the Controller and then deliver the requisite quantity in the requisite shape to the Indian State Railways siding maintained at the appellant 's own factory site, in Indranagar.
in the suburbs of Jamshedpur, in the State of Bihar, and to advise the requisitionist as well as the Controller accordingly. " The correspondence relating to the delivery of steel goods in pursuance of an order placed by one K. Thiruvengadam Chetty & Co. has been produced by the appellant evidently to show the manner in which the transactions were effected.
On December 20, 1952.
Thiruvengadam Chetty and Co., wrote follows to the Controller: 'From Name K. Thiruvengadam Chetty and Company.
Address Iron Merchants and Tata Scob Dealers 93, Rasappa Chetty Street.
Madras 3.
Date 20th December 1952.
To The Iron and Steel Controller, 33, Netaji Subas Road, Calcutta.
Through the Director of Controlled Commodities, Mount Road, Madras.
Dear Sir, Please place on our behalf and at our risk and account our order on Registered Producers for material as per specification given below for delivery in such period ,as you can arrange.
We confirm that this indent is placed 486 subject to the provisions of the Steel Price Schedule regarding prices, etc., and the terms and conditions of business (including payment) of the registered producers on whom the order is placed by you and that delivery or part/delivery from any such registered producer will be accepted by us.
Please direct the registered producers concerned to send us a copy of the works order in confirmation of having booked our Indent.
Ship to Madras Saltcotaurs.
Send R. R. to Messrs. K. Thiruvengadam Chetty and Company, Iron Merchants, 93, Rasappa Chetty Street, Madras 3, through your Madras Office.
Send original and duplicate invoice to Messrs. K. Thiruvengadam Chetty and Company, 93, Rasappa Chetty Street, Madras 3 through your Madras Office.
Date of shipment desired: Ex stock as early as possible.
Quantity Pieoes Section Lengths Complete description un tested of material indented (1) (2) (3) (4) CWT.
10. . 468 M.S. rounnd 1/4" 18 ' 13 B Category 5. . .493 " 3/16" 18 ' do 5. . .453 " 5/16" 18 ' do 20 (Twenty tons only) All P.T. free on rail Saltcotaurs and bundling charge account.
Yours faithfully, (signed). . . by Partner, For K. Thiruvengadam Chetty and Company.
" The Controller forwarded that letter to the appellant with the following remarks: "The above indent is forwarded to Indian Steel and Wire Products Limited, Tatanagar, for delivery in period 1/53 or subsequently in accordance with any general or special directions of the Iron and Steel Controller.
" It may be noted that the Controller merely asked the appellant to deliver to K. Thiruvengadam Chetty and company the goods ordered "in accordance with any general or special directions of the Iron and Steel Controller.
" Our attention was not invited to any general or special order issued by the controller excepting that 487 fixing the base price.
It is clear that it was left to the appellant to supply the goods ordered at his convenience.
On the basis of the, above communication a works order was issued by the appellant to the mill superintendent, a copy of which was sent to Thiruvengadam Chetty and Company.
That order reads: "Works Order: RS/MAD/RM/15/53 of 23rd February 1953.
Delivery: P.D.1/53.
Ship to: Saltcotaurs Book to self.
Freight: To pay.
To The Mill Superintendent.
Please supply the following to the Shipping Department, M.S. Rounds our usual commercial quality in bundles in stock lengths of 12/18 feet.
TONS 1/4" diameter 10 at Rs. 486 per ton free on rail 3/16" 5 at Rs.493 Saltootaurs, plus bundling.
5/16" 5 at Rs. 453 Charge of Rs. 5 per ton.
cc: South India Iron and Hardware Merchants Association, Armenian Street, Madras.
Notice to consignees.
Delivery must be taken within three days of the arrival of the train at destination, a certificate obtained for any wrongful delivery and a claim preferred against the Railway Company forthwith under advise to us.
In the case of non arrival of any consignment advise should be given us as soon as a reasonable time for the journey has elapsed. 'All orders booked are subject to our terms of business and general understanding in force at the time of booking the orders and despatch of goods. ' 'All prices mentioned in the Works Orders are subject to revision, i.e., prices ruling at the time of despatch will be charged. '".
The works order in question specifically says that 'all orders booked are subject to our terms of business and general understanding in force at the time of booking the orders and despatch of goods '.
In fact as seen from the letter of Thiruvengadam Chetty and Co., dated August 31, 1953, the buyers were willing to change by mutual agreement the specifications of the goods to be supplied.
This is what that letter says: 488 agreement the specifications of the goods to be supplied.
This is what that letter says: "If 1/4" size is not ready, please despatch 3/8" size 20 tons as requested in our previous letter.
Please treat this as very urgent.
" From the material on record it is not possible to accept the contention of Mr. S.R. Bannerjee, learned counsel for the appellant that the dealings in question were controlled at every stage, leaving no room of concensus.
From the records before us all that could be gathered is that the controller fixed the base price of the 'steel products and determined the buyers.
In other respects, the parties were free to decide their own terms by consent.
As seen from the correspondence referred to earlier, the controller allowed the appellant to supply the goods ordered either in the first quarter of the year 1953 or subsequently.
In other words, the appellant could supply the goods in question at its convenience.
It was open to the appellant to agree with its customers as to the date on which the goods were to be supplied.
From the works order dated February 23, 1953, a copy of which was sent to one of the appellant 's customers, it is clear that all orders booked were subject to appellant 's terms of business and general understanding in force at the time of 'booking the orders and despatch of goods.
It was also open to the appellant to fix the time and mode of payment of the price of the goods supplied.
Therefore it would not be correct to contend that the transactions were completely regulated and controlled by the controller leaving no room for mutual assent.
In his revision petition dealing with the question of transport of the goods supplied the appellant stated that "the transport of goods was if at all by virtue of an independent arrangement between the petitioner and the persons to whom the goods were supplied. .
This admission clearly shows that the supplies in question were made partly on the basis of mutual assent.
It was Mr. Bannerjee 's contention that for finding out the nature of the transaction we have only to look to the order and not to the documents produced in the case.
According to him, the documents produced in this case do not fully disclose the nature of the transactions; the transactions in question had to be effected under the terms of the order; the order left no room for negotiation between the supplier and its customers and therefore we should conclude that the transactions in question are not sales.
According to Mr. Bannerjee all supplies of iron and steel products could be made only in accordance with the directions given by the controller under cl.
10B of the order.
That being so, he asserted there was no room for mutual assent.
We do not think that this contention of Mr. Bannerjee is well founded.
We are unable to agree with him that the iron and steel products could not have been supplied to any person except in pursuance of an order made by the controller under cl.
10B. We think that supplies by producers can be made in pursuance of an order of the controller under cl.5.
We are not pursuaded 489 by Mr. Bannerjee 's contention that clauses 4 and 5 merely prohibit the prospective buyer and the intending seller from buying or selling without the sanction of the controller and that those provisions do not confer power on the controller to authorise a person to acquire and to permit a producer to sell.
Those provisions, in our judgment, by implication confer power on the controller to issue the necessary authority to the buyer and the seller.
This conclusion of ours is strengthened from the circumstance that cl.10B was not a part of the order till 1946.
That provision was inserted in the order by notification No. 1(1) 1(530) A dated May 26, 1946, It is nobody 's case that the provisions of the order were incapable of being implemented till that date.
The contention of Mr. Bannerjee that the controller derives his power to authorise the buyer to buy and the seller to sell exclusively under cl.
10B, suffers from another infirmity.
Under cl.
10B, the controller gets power to require any person holding stock of iron and steel acquired by him otherwise than in accordance with the provisions of cl. 4 to sell the whole or part of the stock to such person or class of persons and on such terms and conditions as may be specified in the order.
This clause does not empower the controller to issue the authority required under cl. 4.
Our attention has not been invited to any provision in the order if we exclude from consideration cl. 4, under which the controller could have the power to authorise the buyer to buy iron and steel products.
Therefore, it is obvious that he gets that power from cl. 4, itself.
The language employed in clauses 4 and 5 is simi lar.
If the controller gets power to authorise a buyer to buy iron and steel products under cl. 4, there is no reason why he should be held to have no power under cl. 5 to authorise a producer or stock holder to dispose of his stock of iron and steel products.
Further, under cl.
10B, the controller can only require any person holding stock 'of iron and steel to sell the whole or part of his stock to such person or class of persons and on such terms and conditions as may be specified in the order.
That clause does not empower him to direct any manufacturer to manufacture any steel or iron product and to dispose of the same to any person.
In other words, a direction under cl.
10B can only be given to a person holding stock of iron and steel But under cl.5 he can authorise a producer or a stockholder to dispose of any iron or steel whether the same is in stock or not in accordance with the conditions contained or incorporated in a special or general written order issued by him.
the instant case, as can be gathered from the correspondence already referred to, the order issued by the controller could be complied with only after manufacturing the required material.
Hence, the order issued by the controller could not have been issued under cl.
10B. In this view of the matter it is not necessary for us to find out the true scope of cl.
10B. So far as cl.5 is concerned.
admittedly, it does not require the controller to regulate or control every facet of a transaction between a producer and the person to whom he supplies iron and steel products.
490 It is true that in view of the order, the area within which there can be bargaining between a prospective buyer and an intending seller of steel products, is greatly reduced.
Both of them have to conform to the requirements of the order and to comply with the terms and conditions contained in the order of the controller.
Therefore they could negotiate only in respect of matters not controlled by the order or prescribed by the controller.
It is true, in these circumstances, the doctrine of laisser faire can have only a limited ap.
plication.
That is naturally so.
In certain quarters the validity of that doctrine is, seriously challenged.
Under the existing economic compulsions all essential goods being in short supply in a welfare State like ours, social control of many of our economic activities is inevitable.
That does not mean that there is no freedom to contract.
The concept of freedom of contract has undergone a great deal of change even in those countries where it was considered as one of the basic economic requirements of a democratic life.
Full freedom to contract was never there at any time.
Law invariably imposed some restrictions on freedom to contract.
But due to change in political outlook and as a result of economic compulsions, the freedom to contract is now being confined gradually to narrower and narrower limits.
This aspect is vividly brought out in the 'Law of Contract ' by Cheshire and Fifoot (6th ed.) at p. 22.
Dealing with the question of freedom to contract, the learned author observes.
"As the nineteenth century waned it became ever clearer that private enterprise predicated some degree of economic equality if it was to operate without injustice.
The very freedom to contract with its corollary, the freedom to compete, was merging into the freedom to combine; and in the last resort competition and combination were incompatible.
Individualism was yielding to monopoly, where strange things might well be done in the name of liberty.
The twentieth century has seen its progressive erosion on the one hand by opposed theory and on the other by conflicting practice.
The background of the law, social, political and economic, has changed.
Laisser faire as an ideal has been supplanted by 'social security '; and social security suggest status rather than contract.
The State may thus compel persons to make contracts, as where, by a series of Road Traffic Acts from 1930 to 1960, a motorist must insure against third party risks , it may, as by the Rent Restriction Acts, prevent one party to a con tract from enforcing his rights under it; or it may empower a Tribunal either to reduce or to increase the rent payable under a l ease.
In many instances a statute prescribes the contents of the contract.
The Moneylenders Act, 1927, dictates the terms of any loan caught by its provisions; the Carriage of Goods by Sea Act, 1924, contains six pages of rules to be incorporated in every contract for 'the carriage of goods by sea from any port in Great Britain or Northern 491 Ireland to any other port; the Hire Purchase Act 1938 inserts into hire purchase contracts a number of terms which the parties are forbidden to exclude; successive Landlord and Tenants Act from 1927 to 1954 contain provisions expressed to apply 'notwithstanding any agreement to the contrary.".
It would be incorrect to contend that because law imposes some restrictions on freedom to contract, there is no contract at all.
So long as mutual assent is not completely excluded in any dealing, in law it is a contract.
On the facts of this case for the reasons already mentioned, it is not possible to accept the contention of the ,learned counsel for the appellant that nothing was left to be decid ed by mutual assent.
On the other hand, we agree with the learned Advocate General of Madras and Mr. Setalvad who appeared for.
the State of West Bengal, the intervener, that the controller 's directions were confined to narrow limits and there were several matters, which the parties could decide by mutual assent.
We shall now proceed to examine the principal decisions relied ' upon by the learned counsel for the appellant.
In Kirkness vs John, Eudson & Co. Ltd.(1), the material facts were these: On January 1, 1948, railway wagons owned by John Hudson & Co., the tax payers '.
then under requisition by the Minister of Transport. were acquired, by the British Transport Commission under section 29 of the Transport Act, 1947.
Under section 30 of that Act, compensation became payable by the Commission to the tax payers.
The amount paid as compen sation was substantially higher than the written down value of the wagons for income tax purposes and as the tax payers had received allowances under r. 6 of the rules applicable to Cases I and 11 of Sch.
D to the Income Tax Act 1918, they were assessed under section 17 of the Income Tax Act 1945 to give effect to a balancing charge in respect of the excess of the original cost of the wagons over the written down value.
The Court of Appeal held that the transfer of ' wagons under section 29 of the Transport Act 1947 was not a sale at common law, since it did not involve a mutual assent and a price;, it was an acquisition authorised by a statute and not a compulsory purchase.
Therefore, the wagons were not machinery or plant which had been 'sold ' within the meaning of section 17(1) (a) of the Act of 1945 and no, balancing charge could be made under the sub section.
This, decision was affirmed by the House of Lords by a majority.
Speak in,, for the majority, Viscount Simonds observed: "My Lords, in my opinion the company 's wagons, were not sold, and it would be a grave misuse of language, to say that they were sold.
To say of a man who has had his property taken from him against his will and been awarded compensation in the settlement of which be has had no voice, to say of such a man that he has sold his ' property appears to me to be as far from the truth as to, (1) 492 say of a man who has been deprived of his property without compensation that he has given ' it away.
Alike in the ordinary use of language and in its legal concept a sale connotes the mutual assent of two parties.
So far as the ordinary use of language is concerned it is difficult to avoid being dogmatic, but for my part I can only echo what Singleton L.J. said in his admirably clear judgment: 'What would anyone accustomed to the use of the words ,sale ' or 'sold ' answer? It seems to me that everyone must say 'Hudsons did not sell '.
I am content to march in step with everyone and say 'Hudsons did not sell '.
Nor is a different result reached by an attempt to analyse the legal concept.
When Benjamin said in the passage quoted by Singleton and Birkett L. JJ.
from his well known book on Sale, 2nd ed., p. 1, that 'by the common law a sale of personal property was usually termed a 'bargain and sale of goods ', he was by the use of the word 'bargain ' perhaps unconsciously emphasizing that the consensual relation which the word 'bargain ' imports is a necessary element in the concept ', ".
From the facts set out above it is clear that the House of Lords was dealing with a compulsory acquisition and not sale.
Therefore that decision is of no assistance to the appellant.
In Messrs. New India Sugar Mills Ltd. vs Commissioner of Sales Tax, Bihar(1), this Court was called upon to consider whether ,certain transactions effected under the Sugar Control Order 1946 were sales.
By a majority this Court held that they were not sales.
The facts as found by the High Court and accepted by this Court ,are found at pp.
463 and 464 of the report.
They are as follows: "The admitted course of dealing between the parties was that the Government of various consuming States used to intimate to the Sugar Controller of India from time to time their requirement of sugar, and similarly the factory owners used to send to the Sugar Controller of India statements of stock of sugar held by them ' On a consideration of the requisitions received from the various State Governments and also the statements of stock received from the various factories, the Sugar Controller used to make allotments.
The allotment order was addressed by 'the Sugar Controller to the factory owner, direc ting him to supply sugar to the State Government in question in accordance with the despatch instructions received from the competent officer of the State Government.
A copy of the :allotment order was simultaneously sent to the State Government concerned, on receipt of which the competent authority of the State Government sent to the factory concerned detailed instructions about the destination to (1) (1963) Supp.
2 S.C.R. 459. 493 which the sugar was to be despatched as also the quantities of sugar to be despatched to each place.
In the case of the Madras Government it is admitted that it also laid down the procedure of payment, and the direction was that the draft should be sent to the State Bank and it should be drawn on Parry and Company or any other party which had been appointed as stockist importer on behalf of the Madras Government.
" On the basis of those facts, the Court came to the conclusion that there was no room for mutual assent in those transactions.
The facts of the present case are materially different from the facts of that case.
Hence the ratio of that decision does not apply to the facts of the present case.
Whether in a given case there was mutual assent or not is a matter to be decided on the facts of that case.
In Calcutta Electric Supply Corporation Ltd. vs Commissioner of Income Tax, West Bengal(1).
the facts were: The assessees were an electric supply company.
During the war the government requisitioned an electricity generating plant of the assessees under r. 83(1) of the Defence of India Rules.
The Government wanted to acquire that plant.
As the assessees were not willing to sell the plant, they required the government to re examine the position and to rescind the order depriving them of the plant, but the government refused to re consider that decision.
The amount which the assessees received as price or compensation for the plant exceeded the written down value of the plant by Rs. 3,27,840/ .
The taxing authorities treated the excess as assessees ' profits under section 10(2) (vii) of the Indian, Income Tax Act 1922 and assessed that amount to tax.
On a reference under section 66(1) of that Act, as to whether the amount in question can be considered as assessees ' profit, Harries, C. J. and Banerjee, J. held that the transaction by which the government acquired the plant could not be regarded as a sale within the meaning of section 10(2) (vii) and therefore the sum of Rs. 3,27,840/ was not taxable as profit under that provision.
The Court further observed that the ordinary meaning of the word 'sale ' is a transaction entered into voluntarily between two persons known as buyer and seller by which the buyer acquires the property of the seller for an agreed consideration known as 'price '.
The rule laid down in that decision is the same as that laid down by the House of Lords in Kirkness vs John Hudson & Co. Ltd.(2).
In this case also the Court was dealing with a compulsory acquisition and not sale.
In M/s. Cement Limited vs The State of Orissa(3), the Court was dealing with transactions effected under the Cement Control Order 1956.
Therein the assessee company.
a manufacturer of cement, was required to sell cement to the State Trading Corporation On payment of stipulated price.
3 of the Cement Control Order provided "Every producer shall sell (1)(a) the entire quantity of cement held in stock by him on the date of the commencement (1) , (2) (3) 12 S.T.C. 205.
494 of the order, and (b) the entire quantity of cement which may be produced by him during a period of two years from the date of commencement of this order to the Corporation and deliver the same to such person or persons as may be specified by the Corporation in this behalf from time to time, (2) notwithstanding any contract to the contrary, every producer shall dispose of cement lying in stock with him or produced by him, in accordance with the provisions of sub cl.
(1) and shall not dispose of any cement in contravention thereof".
6(1) was to the effect that the price at which a producer may sell cement shall be specified in the schedule.
The sales in this case were effected under the aforementioned clauses 3 and 6.
It is under those circumstances that the Court came to the conclusion that the transactions in question were not sales but were in the nature of compulsory transfer of title.
This case again is of no assistance to the appellant.
The appellant 's learned counsel also read to us the decisions in North Adjai Coal Company (P) Ltd. vs Commercial Tax Officer and others(1) and section K. Roy vs Additional Member, Board of Revenue, West Bengal(2).
On the facts of those cases, the Court came to the conclusion that the transactions in question were not sales.
For the reasons already stated, we are unable to accept the contention that the transactions with which we are concerned in these cases are not sales.
Out of the four elements mentioned earlier, three were admittedly established, namely, the parties were competent to contract, the property in the goods was transferred from the seller to the buyer, and price in money was paid.
The only controversy was whether there was mutual assent.
Our finding is that there was mutual assent in several respects.
Hence, we agree with the High Court that the transactions before us are sales.
That takes us to the next contention by the appellant i.e., that there was no material to conclude that the goods were delivered in the State of Madras for consumption.
There is no dispute that the goods in question were delivered in the State of Madras.
The dispute centres round the question whether it is proved that they were delivered for consumption in that State.
The learned counsel for the appellant conceded that actual consumption within the State need not be proved.
All that is required to be shown is that they were delivered for consumption in the State.
The only question is whether there was any material to support the conclusion of the Sales Tax Appellate Tribunal, the final fact finding authority, that the goods were delivered in the Madras State for consumption in that State.
The High Court rightly proceeded on the basis that "the burden is certainly upon the State to establish facts upon which a subject can be taxed under a financial enactment.
" But it accepted the finding of the Sales Tax Appellate Tribunal that from the facts and circumstances established it is a reasonable inference to draw (1) 17 S.T.C. 514.
(2) 18 S.T.C. 379.
495 that the goods were delivered for consumption in the Madras State.
This aspect was dealt with by the Tribunal in para 1 1 of its order dated April 17, 1959.
On that question this is what the Tribunal says: "It will be an onerous task to pursue the subsequent history of every inter State sale transactions to find out whether after successive change of hands the ' goods left the state; but it will be permissible in such cases to consider the broad pattern of the transaction, the surrounding circumstances and any other relevant date to draw a reasonable conclusion therefrom.
In the cases before us, it is admitted that the sales were in pursuance of a scheme of internal distribution under the control order applicable to the whole of India.
That there was necessity to draw up such a scheme, indicates that the goods were essential goods, that the supply was inadequate to meet the demand, and that unless there was control and restriction in distribution it was likely that the goods would pass into the black market, and would be sold at exorbitant rates.
It is permissible inference that controlled stockists, registered stockists and registered dealers, who are the principal buyers from the appellants and who could be expected to have been given quotas in the scheme of controlled distribution, would be people expected to meet the local demand for the consumption of the controlled goods.
It is also well known to people familiar with the operation of a controlled scheme and distribution of goods that quotas are given against proved demands, and that it is not part of the scheme of distribution to provide for goods sold in one State being exported to other states inside the Union territory because each State has got its own quota of goods and list of controlled stockists, registered stockists and so on.
Therefore we infer from the analysis given of the transactions by the appellants, that the sales to various groups of purchasers, registered stockists and controlled ' stockists and so on are all intended to meet the local demands for steel products and not for re export.
An analysis of the amount concerned in each of these transactions show that the quantity of steel involved would not be large in each individual case, a circumstance again point to the inference that the sales were intended to meet the requirements of the consumers in Madras State.
In the case of sales to local Government departments, it is obvious that sales were intended for internal consumption and not reexports".
Strangely enough, the High Court at the first instance thought that this finding was unsupported by evidence.
Consequently it remanded the case back to the Tribunal for a fresh finding on that aspect 496 after giving both the parties opportunity to adduce further evidence oral and documentary.
No fresh material was placed before the tribunal after the case was sent back to it.
But on the basis of the material already on record, the tribunal again came to the very conclusion that it had come earlier.
When the cases again came back to the High Court.
that finding was accepted as correct.
In our opinion, the High Court was not right in rejecting that finding at the first instance.
The finding of the tribunal is a reasonable finding .
The inferences drawn by it are reasonable inferences from the facts proved or admitted.
It is reasonable to assume that the supplies of iron and steel products were being made to stockists in a State for consumption in that State.
It may be, as found in this case, that a small portion of the supplies had gone out of the State.
But that is not a relevant circumstance.
What we have to see is whether the Supplies in question were made for consumption in the Madras State.
On that question the finding of the Tribunal is conclusive.
The contentions of the appellant that the findings of the tribunal about the quantum of the turnover were not based on any evidence, or that those findings were arrived at in violation of the principles of natural justice or that the decision of the High Court is perverse, are wholly untenable contentions.
At the time of the hearing no reasons were advanced in support of those contentions.
Hence those contentions do not merit any detailed examination.
In the result, these appeals fail and they are dismissed with costs hearing fee, one set.
Appeals dismissed. | At the instance of the steel controller exercising powers under the Iron and Steel (Control of Production and Distribution) Order, 1941, the appellant supplied certain steel products to various persons in Madras State during the financial years 1953 54, 1954 55 and part of the financial year 1955 56.
The State of Madras assessed the turnover of the appellant relating to those transactions to sales tax under the Madras General Sales Tax Act, the law in force at that time.
The appellant contended before the authorities under the Sales Tax Act as well as the High Court that the transactions were not sales and therefore could not be taxed.
The further contention was that there was no material to show that the deliveries were for consumption within the State of Madras so as to become taxable within the State.
From the adverse decision of the High Court the appellant, by special leave, came to this Court.
In support of the contention that the transactions were not sales it was urged that they were effected under the directions of the Iron and Steel Controller given under cl.
10B of the Order and that being so there was no mutual assent between the parties to the transactions.
HELD:The authority of the controller to pass the orders in question came from cl. 5 of the order and not cl.
10B. The orders were in respect of goods not yet manufactured whereas under cl.
10B directions could be given only in respect of goods already in stock.
So far as cl. 5 is concerned admittedly it does not require the controller to regulate or control every facet of a transaction between a producer and the person to whom he supplies iron and steel products.
[488H: 489C H] In modern times the doctrine of laisser faire can have only a limited application.
That does not mean that there is no freedom of contract.
So long as mutual assent is not excluded in any dealing, in law it is a contract.
On the facts of the present case it was not possible to accept the contention that nothing was left to be decided ' by mutual assent.
On the other hand the controller 's directions were confined to narrow limits and there were several matters which the parties could decide by mutual consent.
[49OB; 491B C] Kirkness vs John Hudson & Co. Ltd. ; M/s. New India Sugar Mills Ltd. vs Commissioner of Sales tax, Bihar, [1963] Supp. 2 S.C.R. 459; Calcutta Electric Supply Corporation Ltd. vs Commissioner of Income tax.
West Bengal.
; M/s. Cement Ltd. vs State of Orissa, 12 S.T.C. 205; State of Madras vs Gannon Dunkerley, ; ; North Adjai Coal Company (P) Ltd. vs, Commercial Tax Officer & Ors.
17 S.T.C. 514 and section K. Roy vs Additional Member, Board of Revenue, West Bengal, 18 S.T.C. 379, refer red to.
(ii)From the facts and circumstances the Tribunal rightly found ' that the supplies were made to stockists in the State of Madras for 480 consumption in that State.
It may be that a small portion of the supplies had gone out of the State.
But that was not a relevant circumstance.
What had to be seen Was whether the supplies in question were made for consumption in the Madras State.
On that question the finding of the Tribunal was conclusive.
[496B C] |
Appeals Nos.
511 514 of 1966.
Appeals, by special leave from the judgments and orders dated August 9, 1961, July 20, 1964, of the Bombay High Court, Nagpur Bench in Misc.
Civil Applications Nos. 1118 of 1959.
192 of 1961.
1360 of 1959 and 193 of 1961 respectively.
H. R. Gokhale, M. R. Bhandare, P. C. Bharta, and O. C. Mathur, for the appellant (in all the appeals).
N. section Bindra, P. C. Chatterjee, section P. Nayar for R.H. Dhebar, the respondents (in all the appeals).
The Judgment of WANCHOO C. J., MITTER and HEGDE, JJ. was delivered by HEGDE, J. The dissenting judgment of BACHAWAT and RAMASWAMI, JJ. was delivered by BACHAWAT, J. HEGDE, J.
The principal question canvassed in this group of appeals by special leave is whether section 11(4)(a) of the Central Provinces and Berar Sales Tax Act 1947, to be referred to as the Act hereinafter, is ultra vires Article 14 of the Constitution and consequently the notices impugned in the writ petitions from which these appeals arise are liable to be struck down and the respondents restrained from levying sales tax on the appellants for the period May 1, 1952 to October 31, 1955.
The appellants are a private limited company carrying on business inter alia as dealers in iron and steel materials in Vidharba region of the Maharashtra State.
In that region they have more than one place of business.
They registered themselves as dealers under section 8A of the Act and obtained a certificate of registration on August, 17, 1947.
Their assessment year as shown in their registration certificate is from November 1 to October 31.
They were required to submit quarterly returns of their turnovers.
They did so till April 30, 1952.
Thereafter no returns were submitted.
On September 13, 1955, the Assistant Commissioner of Sales Tax, the assessing authority at that time, issued a notice calling upon the appellants to show cause why action should not be taken against them under sections 10(3) and 11(4)(a), on account of their failure to furnish the return for the period 1.1.53 to 31.12.53.
Similar notices were issued to them on October 27, 1955 for the period 1.1.54 to 31.12.54 and on July 7, 1956 for the period 1.1.55 to 31.12.55.
It appears that the appellants repeatedly took time for submitting their explanation.
The first respondent to whom the appellants ' case stood transferred issued in 1958 fresh notices to the appellants similar to those issued in 1955.
At that stage the appellants objected to the validity of those notices both orally as well as in writing on the ground that their assessment year was not the calendar year as mentioned in those notices but the year ending October 31.
Evidently in view of that objection, the first respon dent issued another set of notices on July 8, '1959.
The appellants contended that those notices were barred by time.
Thereafter the appellants challenged the validity of the notices issued in 1959 in the petitions under article 226 from which these appeals arise.
In these apneals the questions arising for decision are whether section 11 (4)(a) or section 11 A(3) or any parts thereof contravene the guarantee of equal protection of the laws or equality before the law or whether those provisions are based on a valid classification which is reasonable in view of the object with which they were enacted.
Mr. H.R. Gokhale learned counsel for the appellants, urged that both these provisions deal with the same class of persons having common characteristics and Properties and hence there is no just 666 basis for the classification made.
According to him the classification complained of has brought about a discrimination.
Further he asserted that the Act had conferred arbitrary power on the assessing authority to pick and choose from the persons belonging to the same class to be dealt with either under section 11(4)(a) or under 11A(1).
He urged that as a case coming under section 11(4)(a) also falls under section 11 A, as the law now stands, the persons proceeded against under section 11A(1) will have the benefit of the period of limitation prescribed therein; while the said benefit is not available for those proceeded under section 11(4)(a).
According to the learned counsel for the revenue, sections 11(4)(a) and 11A deal with different classes of persons; the classification made under those provisions is a reasonable classification having nexus with the object sought to be achieved.
Before adverting to the points at issue, it would be convenient to set out the circumstances under which section 11A(3) which is said to have brought about the discrimination complained of came to be enacted.
The Act is in force ever since 1947.
Section 11A as it originally stood was inserted into the Act in 1953.
In Bisesar House vs State of Bombay(1) the question arose whether a notice under section 11(2) initiates a fresh proceeding and if that is so, whether the limitation prescribed under s.11A(1) is attracted to that proceeding.
A Full Bench of the Bombay High Court speaking through Chagla, C. J. held that a notice under section 11(2) initiates a fresh proceeding and to such a proceeding the limitation prescribed in section 11A is attracted.
From the ratio of that decision it followed that the limitation prescribed under section 11 A also governed proceedings under s.11(4)(a).
Evidently, to get over the effect of that decision, the Bombay Legislature enacted the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act 1959 (No. 22 of 1959) which came into force on April 18, 1959.
Section 6 of that Act inserted the new subsection (3) into S.11A and the reason for that amendment, as stated in the statement of objects and reasons, is as follows: "In its judgment in Bisesar House vs Commissioner of Sales Tax, Nagpur, the Bombay High Court has held that the period of limitation laid down in S.IIA of the Central Provinces and Berar Sales Tax Act, 1947, for reassessment of the turnover which has escaped assessment applies to original assessment also.
It has also been found that the said limitation applies to suo motu revisions also.
The said decision affects the original assess ments and suo motu revisions, which have been made after the expiry of the period of limitation laid down for the reassessment of turnover escaping assessment under the different sales tax laws in force in this State.
It has, (1) 60 B.L.R. 1395 667 therefore, become necessary to establish the validity of all such assessments and to provide that the period of limitation prescribed for reassessment of escaped turn overs does not apply to original assessment and suo motu revisions.
" In Ghanshyam Das vs Regional Assistant Commissioner of Sales Tax, Nagpur(1) this Court did not agree with that decision so far as the scope of s.11(2) is concerned.
Therein it was held that a notice under section 11(2) does not initiate a fresh proceeding and to that proceeding the limitation prescribed in section 11A does not apply.
Though in view of that decision, s.11A(3) became superfluous in respect of a proceeding in which a notice under section 11 (2) is given, it undoubtedly changed the law in respect of proceedings under s.11(4)(a).
Before we proceed to consider the aforementioned complaint of discrimination, it is necessary to have a survey of the relevant provisions of the Act.
'Dealer ' is defined in section 2(c) as meaning a person who whether as principal or agent carries on in the State the business of selling or supplying goods whether for commission, remuneration or otherwise and includes a firm, a partnership, a Hindu undivided family or a State government or any of their departments and includes also a society, club or association selling or supplying goods to its members.
A 'registered dealer ' is defined in section 2(f) as meaning a dealer registered under the Act.
Section 2(j) defines 'turnover ' as meaning the aggregate of the amounts of sale prices and parts of sale prices received or receivable by a dealer in respect of the sale or supply of goods or in respect of the sale or supply of goods in the carrying out of any contract effected or made during the prescribed period; and the expression 'taxable turnover ' means that part 'of a dealer 's turnover during such period which remains after deducting therefrom his turnover during that period in respect of the sale of goods declared tax free under section 6 The definition of the term 'year ' as provided in section 2(1) to the extent necessary for our present purpose reads: "year ' means the 12 months ending on 31st day of March, or if the accounts of the assessee are made up to any other day in respect of a year ending on any date other than the 31st day of March, than at the option of the assessee the year ending on the day to which his accounts have been so made up. . . ."
Section 8 says: "(1) No dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered as such and possesses a registration certificate."
Section 8A provides for voluntary registration of a dealer.
Sub s.(3) thereof provides that every dealer who has been registered upon an application made under this section so long as his registration remains in force, be liable to pay tax under that Act.
Sub section(4) of that section stipulates that the registration of a dealer upon an application made under that section shall be in force for a period not less than three complete years and shall remain in force thereafter unless cancelled under the provisions of the Act.
Section 10 provides for returns by dealers.
It reads: "(1) Every such dealer as may be required so to do to by the Commissioner by notice served in the prescribe manner and every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed."
Sub section(2) of that section is not necessary for our present purpose.
Sub section(3) of that section reads: "(3) it a dealer fails to comply with the requirement of a notice issued under sub section (1) or a registrate dealer fails to furnish his return for any period within prescribed time to the prescribed authority without any sufficient cause, the Commissioner may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one fourth of the amount of the tax which may be assesses on him under section 11 ".
Sections 11 and 11A are important for our present purpose.
They deal with assessment and assessment on turnover escaping assessment.
They, to the extent necessary for our present purpose read: "11(1).If the Commissioner is satisfied that the returns furnished by a dealer in respect of any period are correct and complete, he shall assess the dealer on them, (2) If the Commissioner is not so satisfied he shall serve the dealer with a notice appointing a place and day and directing him (i) to appear in person or by an agent entitled to appear in accordance with the provision of section 11B, (ii) to produce evidence or have it produced in support of the returns or (iii) to produce or cause to be produced any accounts, registers, cash memoranda or other document, as may be considered necessary by the Commissioner for the purpose, (3) After hearing the dealer or his agent and examining the evidence produced in compliance with the requirements of clause (ii) or clause (iii) of sub section(2) and such further evidence as the Commissioner may be require, the Commissioner shall assess him to tax.
(4) If a registered dealer (a) does not furnish returns in respect of any period by the prescribed date or (b) having furnished such returns fails to comply with any of the terms of a notice issued under sub section (2), or (c) has not regularly employed any method of accounting or if the method employed is such that, in the opinion of the Commissioner, assessment cannot properly be made on the basis thereof, the Commissioner shall in the prescribed manner assess the dealer to the best of his judgment: Provided that he shall not so assess him in respect of the default specified in clause (a) unless the dealer has been first given a reasonable opportunity of being heard." (Sub sections 5 and (6) are not necessary for our present purpose).
Section 11A provides: "(1).If in consequence of any information which has come into possession, the Commissioner is satisfied that any turnover of a dealer during any period has been under assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed to reassess or assess, as the case may be, the tax payable on any such turnover; and the Commissioner may direct that the dealer shall pay, by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount.
The assessment or reassessment made under sub section (1) shall be at the rate at which it would have been made, had there been no under assessment or escapement.
Nothing in sub sections (1) and (2) (i) shall apply to any proceeding (including any notice issued) under Sections 11 or 22A or 22B, and (ii) notwithstanding any judgment, decree or order 'of a Court or Tribunal, shall be deemed ever to have been applicable to such proceeding or notice.
(b) The validity of any such proceeding or notice shall not be called in question merely on the ground that such proceeding or notice was inconsistent with the provisions of sub sections (1) and (2).
Rule 19 of the rules framed under the Act provides that every registered dealer should furnish to the appropriate sales tax 670 officer his quarterly return in the prescribed form within one calendar month from the expiry of the quarter to which the return relates.
Each of such returns submitted should be accompanied by a treasury challan in the form prescribed in proof of the fact that he had paid the tax payable on the basis of his return, The only other rule relevant for Our present purpose is r. 32 in Part VII of the Rules, which deals with assessment of tax and/ or penalty.
That rule provides that where a registered dealer has rendered himself to a best judgment assessment as well as penalty by reason of his default in furnishing the prescribed return or re turns in respect of any period by the prescribed date, the assessing authority shall serve on him a notice in form 12 specifying the default, escapement or concealment as the case may be and calling upon him to show cause by such date ordinarily not less than 30 days, from the date of issue of the notice, as may be fixed in that behalf, why he should not be assessed or reassessed to tax, or a penalty should not be imposed upon him and directing him lo produce on the said date his books of account and other documents which the assessing authority may require or which he may wish to produce in support of his objection.
That rule further pro vides that no such notice shall be necessary where the dealer, having appeared before the assessing authority, waives such notice.
Now we may turn to the questions formulated for decision.
As mentioned earlier, the main contention advanced on behalf of the appellants is that sub section(3) of section 11A has brought about a discrimination between those dealers proceeded against under section 11(4)(a) and those dealt with under section 11A.
The contention advanced on behalf of the appellants is that the turnover of a registered dealer who has failed to submit his return and also to deposit the tax due from him, has escaped assessment; the case of such a dealer comes both within section 1 1 (4) (a) as well as section 11A; therefore, he can be dealt with under either of those two provisions.
Where section 11A prescribes a period of limitation for a proceeding under that provision, in view of sub section 3 of section 11A a proceeding under section 11(4)(a) can be initiated at any time; under those circumstances it is open to the authorities to proceed against some of the same class of dealers under section 11(4)(a) and others under section 11A.
It was said on their behalf that it is well settled that in its application to legal proceedings, article 14 assures to every one the same rules of evidence and modes of procedure; in other words, the same rule must exist for all in similar circumstances.
On the other hand, it was urged on behalf of the revenue that section 11(4)(a) deals only with registered dealers who have certain advantages under the Act, whereas section 11A deals with dealers who do not come either under section 11(4) or section 11(5), and therefore the classification of dealers made under the various provisions is based on real and substantial distinction bearing a just and reasonable relation to the object sought to be attained.
671 We have now to see whether the dealers who come within the mischief of section 11(4)(a) can also be dealt with under section 11A.
Before a person can be dealt with under section 11A, it must be shown that in consequence of any information which has come into his possession, the Commissioner is satisfied that any turnover of that dealer during any period has been under assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom.
Quite plainly the expression 'dealer ' in section IIA(1) includes both registered and unregistered dealers.
In this case we are concerned with the escapement of assessment.
Therefore the first question that arises for decision is whether it can be said that the appellants ' turnovers for the period 1 5 52 to 30 10 55 had escaped assessment.
There is no dispute that those turnovers had not been assessed.
From the fact that those turnovers had not been assessed, can it be said that they had escaped assessment? In Maharaj Kumar Kamal Singh vs Commissioner of Income Tax, Bihar and Orissa,(1), this Court laid down that the expression "has escaped assessment" in section 34(1)(b) of the Indian Income Tax Act, 1922 is applicable not only where the income has not been assessed owing to inadvertence or oversight or owing to the fact that no return has been submitted, but also where a return has been submitted but the income tax officer erroneously failed to tax a part of assessable income.
In Commissioner of Income Tax, Bombay City vs M/s. Narsee Nagsee and Co., Bombay(2) interpreting the words "profits escaping assessment" in section 14 of the Business Profits Tax Act, 1947, this Court held that those words apply equally to cases where a notice was received by the assessee but resulted in no assessment, under assessment or excessive relief and to cases where due to any reason no notice was issued to the assessee and there was no assessment of his income.
Kapur, J. speaking for the majority of Judges in that case, observed (at p. 993 of the report) that it is well settled that an income escapes assessment when the process of assessment has not been initiated as also in a case where it has resulted in no assessment after the completion of the process of assessment.
The true scope of the expression "escaped assessment" in section 11A came up for consideration before this Court in Ghanshyam Das vs Regional Assistant Commissioner of Sales Tax, Nagpur(3).
This is what Subba Rao, J. (as he then was) who delivered the judgment of the majority of the Judges, observed in that regard: "In Commissioner of Income Tax, Bombay vs Pirojbai N. Contractor the words 'escaped assessment ' in the Indian Income tax Act were defined.
It was held therein that the said words were wide enough to include cases where no notice under s.22(2) of the Income tax Act had been issued to the assessee and therefore his income had not been assessed at all under section 23 thereof.
The said view has been assumed to be correct by this Court in Maharaj Kumar Kamal Singh vs Commissioner of Income Tax, Bihar and Orissa [1959] Supp. 1 S.C.R. 10 and Maharajadhiraj Sir Kameshwar Singh vs State of Bihar ([1960] 1 S.C.R. 322) and extended to cover a, case where the first assessment was made in due course but a part of the income escaped therefrom.
This Court, in Commissioner of Income tax, Bombay vs Narsee Nagsee and Co. ([1960] 3 S.C.R. 988), construing the provisions of section 14 of the Business Profits Tax Act, 1947, reviewed the law on the subject and came to the following conclusion: All these cases show that the words "escaping assessment" apply equally to cases where a notice was received by the assessee but resulted in no assessment at all and to cases where due to any reason no notice was issued to the assessee, and, therefore, there was no assessment of his income. '
It is true that the said decisions were given with reference to either section 34(1) of the Income Tax Act or section 14 of the Business Profits Tax Act but so far as the present enquiry is concerned the said sections are in pari materia with section 11A of the Act.
In construing the meaning of the expression 'escaped assessment ' in section 11A of the Act there is no reason why the said expression should bear a more limited meaning than what it bears under the said two Acts.
All the three Acts are taxing statutes and the three relevent sections therein are intended to gather the revenue which has improperly escaped.
A division Bench of the Madras High Court in the State of Madras vs Balu Chettiar (7 S.T.C. 519) following the decision of a Full Bench of that Court, held that where an assessee did not tile at any time a return of his turnover for a year and, therefore, there was no assessment made, the turnover escaped assessment.
It was observed therein: 'Whether it was a case of omission or of deliberate concealment on the part of the assessee, he did not submit any return.
It was his default that led to the escape of the turnover for 1951 52 from assessment to the tax lawfully due.
It was the whole of the turnover for that year that escaped assessment. ' It is not necessary to multiply citations.
We, therefore, hold that the expression 'escaped assessment ' in section 11A of the Act includes that of a turnover which has not been assessed at all, because for one reason or other no assess ment proceedings were initiated and therefore no assessment was made in respect thereof."
In one of the appeals dealt with in that judgment, i.e. C.A. No. 102 of 1901, this Court had to consider whether a case under 673 (a) also comes under section 11A.
The Court answered that question in the affirmative seen earlier it was the duty of the appellants not only to submit their quarterly returns but send along with those returns the treasury challans in proof of the payment of the tax admittedly due from them.
As they have failed to do so within the prescribed period, it follows that the turnovers in question had escaped assessment.
This takes us to, the next question whether in the instant case the assessing authority can be said to have been satisfied about the escapement of the assessment as a consequence of any information which had come into his possession.
From the notices issued in 1955 as well as later on, it is clear that the assessing authorities were satisfied about the escapement of the assessment due from the appellants.
But the real question is whether they were so satisfied "in consequence of any information which had come into their possession".
The assessing authorities knew that the appellants had neither submitted their returns nor treasury challans in proof of the payment of the tax due from them.
From that circumstance it is reasonable to, hold that in consequence of the information that the appellants had not submitted their returns as well as the treasury challans the assessing authority should have been stisfied about the escapement of the assessment.
It was urged on behalf of the revenue that 'information ' contemplated by s.11A should be from some outside source and not something that could be gathered by the assessing authority from his own records.
According to the revenue in the instant case there was no information from any outside source, therefore, it cannot be said that the assessing authority was satisfied about the escapement of tax in consequence of any information which has come into its possession.
In our view, this contention is untenable.
In Maharaj Kumar Kamal Singh vs Commissioner of Income Tax, Bihar and Orissa, this Court held that the word 'information ' in section 34(1)(b) of the Income Tax Act, 1922, includes information as to the true and correct state of the law and so would cover information as to the relevant judicial decisions.
It was laid down therein that that information need not be about any fact; it may be even as to the legal position.
In other words, the term 'information ' in section 34(1)(b) of the Income Tax Act 1922 really means knowledge.
In Salem Provident Fund Society Ltd. vs Commissioner of Income Tax madras(1) a division bench of the Madras High Court interpreting the scope of the words 'information which has come into his possession ' found in section 34 of the Indian Income Tax Act, observed thus: "We are unable to accept the extreme proposition that nothing that can be found in the record of the (1) 674 assessment which itself would show escape of assessment or under assessment, can be viewed as information which led to the belief that there has been escape from assessment or under assessment.
Suppose a mistake in the original order of assessment is not discovered by the Income Tax Officer himself on further scrutiny but it is brought to his notice by another assessee or even by a subordinate or a superior officer, that would appear to be information disclosed to the Income Tax Officer.
If the mistake itself is not extraneous to the record and the informant gathered the information from the record, the immediate source of information to the Income, Tax Officer in such circumstances is in one sense extraneous to the record.
It is difficult to accept the position that while what is seen by another in the record is 'information ' what is seen by the Income Tax officer himself is not information to him.
In the latter case he just informs himself.
It will be information in his possession within the meaning of section 34.
In such cases of obvious mistakes apparent on the face of the record of assessment, that record itself can be a source of information, if that informa tion leads to a discovery or belief that there has been an escape of assessment or under assessment."
The meaning of the word 'information ' came up again for consideration before a division bench of the Kerala High Court in United Mercantile Co. Ltd. vs Commissioner of Income Tax Kerala(1).
Their Lordships held that to 'inform ' means to 'impart knowledge ' and a detail available to the Income Tax Officer in the papers filed before him does not by its mere availability become an item of 'information '.
It is transmuted into an item of information in his possession only if and when its existence is realised and its implications recognized.
Applying that test to the facts of the case before them the Court held that the awareness of the Income Tax Officer for the first time after the assessment order of November 19, 1957, that the bonus shares were issued not out of Premiums received in cash and the consequent result in the light of the Finance Act 1957, was information within the meaning of that expression as used in section 34(1) of,the Indian Income Tax Act, 1922, and consequently the reopening of the assessment under that provision was not illegal.
In our judgment, the knowledge of the fact that the appellants had not submitted their quarterly returns as well as the treasury challans.
constituted In information to the assessing authority from which it could be satisfied and in fact it was satisfied that the turnovers with which we are concerned in this case bad escaped assessment.
(1) 675 From the above conclusions it follows that the appellants ' case falls both under section 11(4)(a) and section 11A(1).
Therefore, it was open to the assessing authority to proceed against them under any one of those two sections.
But as they were proceeded against under section 11(4)(a) they cannot have the benefit of the period of limitation prescribed under section 11 A(1).
Hence, it must be held that the present case falls within the rule laid down by this Court in Suraj Mail Mohta and Co. vs A. V. Visvanatha Sastri & another(1).
On the facts found it follows that section 1 (4)(a) has become a discriminatory provision in view of section 11 A(3).
Hence the same is liable to be struck down under article 14.
But for the inclusion of sub section 3 in section 11A, there would have been no discrimination between those dealt with under section 11(4)(a) and those under section 11A(1).
The period of limitation prescribed in section 11A(1) would have attracted itself to proceedings under section 11(4)(a) as held by this Court in Ghanshyam Das 's case(2).
Mr. Bindra, learned counsel for the revenue, contended that a registered dealer has certain advantages over an unregistered dealer; therefore the classification made under the Act is a reasonable classification.
To be a valid classification, the same must not only be founded on an intelligible differentia which distinguishes persons and things that are grouped together from others left out of the group but that differentia must have a reasonable relation to the object sought to he achieved.
Both section 11(4)(a) and section 11A(1) concern themselves with escaped assessments.
The classification suggested has no nexus with that object.
That much is established by the decision of this Court in Ghanshyam Das 's case(1) which is binding on us.
It is true the State can by classification determine who should be regarded as a class for the purpose of legislation and in relation to a law enacted on a particular subject, but the classification must be based on some real and substantial distinction bearing a just and reasonable relation to the object sought to be attained and cannot be made arbitrarily and without any substantial basis.
Judged from the object sought to be achieved by the Act, we are of the opinion that the classification made between the registered and unregistered dealers is not a reasonable classification.
From this conclusion it follows that section 11(4)(a) is liable to he struck down as being discriminatory in view of section 11A(3).
Section 11(4)(a) is separable from the rest of the sub section.
Its separation from that sub section does not affect the implementation of the other provisions of the Act.
This takes us to the question which was debated at our in stance whether the notices issued by the assessing authority in 1955 were valid notices.
The High Court had not considered this question, though it appears that the same was presented to it for decision (1) ; , (2) ; L/P(N)7SCI 4 676 by the parties.
In the course of its judgment, the High Court observed: "In this view (in view of its earlier findings) of the matter it is not necessary to consider whether the earlier notices of the year 1955 are good and valid notices or whether they stood superseded by subsequent notices of 1958 and 1959".
For convenience we shall take up for consideration notice No. 4519/STN dated 13 9 55.
Our conclusions in respect of that notice would cover the other notices.
The material facts as set out by the High Court, the correctness of which was not disputed before us, are these: "On the 3rd September, 1955, the Assistant Commissioner, Sales Tax, issued a notice under section 10(3), section 11(4) (a), section 11A and sub section(1) of section 22C of the Act, calling upon the petitioners to show cause why action should not be taken against them under section 10(3) and section 11(4) of the Act on account of their failure to furnish the returns for the period 1 1 53 to 31 12 53.
Similar notices were given on 27th October, 1955 for the period 1 1 54 to 31 12 54 and on 7th July 1956 for the period 1 1 55 to 31 12 55.
From those facts, it is seen that no notice had been issued within three years in respect of the turnover relating to the period from 1 5 52 to 31 12 52.
The assessment in respect of that period is clearly barred in view of our earlier conclusion.
The period 1 1 1 52 to 31 1 53 forms part of the quarter commencing from 1 11 52.
No notice was given in respect of that quarter.
A quarter forms a unit by itself.
Therefore, it follows that the proceeding in respect of that quarter is also barred by limitation.
Now we shall take up the question whether the notices issued in 1955 in respect of the turnovers relating to other quarters were in accordance with law.
The notice No. 4519/STN dated 13 9 55 reads."Notice (for 1 1 53 to 31 12 53) dated 13 9 55.No. 4519/ STN.D/13 9 55.
Form XII (See rule 32) Notice under sub section (3) of section 10, sub section (4) (a) and (5) of section 11, sub section (1) of section 11 (A) and sub section (1) of section 22 of the Central Provinces and B erar Sales Tax Act, 1947.
Whereas Shri Anandji Haridas and Co., Ltd., Nagpur.
You have failed to furnish a return as required by a 677 notice in that behalf served on you under section 10(1) of the Central Provinces and Berar Sales Tax Act, 1947.
OR You being a registered dealer have failed to furnish a return for the periods 1 1 53 to 31 12 53 and have thereby rendered yourself liable under section 11 (4) to be assessed to the best of judgment; Further, you are hereby directed to attend in person or by a person authorised by you in writing in that behalf, being a person specified in section 11B(1) before me and to produce or cause to be produced your books of accounts and the documents specified in the schedule hereunder and any evidence on which you rely in support of your objection at Jabalpur at 11 00 A.M. on 22 9 55.
Sd/ Asstt.
Commissioner of Sales Tax Nagpur Region, Nagpur."
It is true that it is not a notice in respect of any particular quarter, it is a notice in respect of the period 1 1 53 to 31 12 53.
In the State of Orissa and another vs M/s. Chakobhai Chelabhai and Company,(1) this Court held that the issue of one notice under section 12(5) of the Orissa Sales Tax Act, 1947 which section is similar to section 11(4)(a), for several quarters was not contrary to law as the section makes reference to a period which might consist of more than one quarter.
From the notice in question it cannot be made out whether the assessing authorities wanted to deal with the appellants under section 10(1) or under section 11(4).
The notice says that the appellants "had failed to furnish the return as required by a notice in that behalf served on them under section 10(1) of the Act, or that they being registered dealers had failed to furnish return for the periods mentioned therein and thereby rendered themselves liable under section 11(4) to be assessed to the best of judgments Quite dearly, the first alternative mentioned in the notice did not apply to the appellants.
They are registered dealers.
No notice under section 10(1) had been given to them.
The assessing authority by mistake had failed to strike out the first alternative shown in the printed form.
That circumstance could not have prejudiced the appellants.
It was held by this Court in Chakobai Chelabhai 's case(1) referred to earlier that such a mistake does not vitiate the notice issued.
But the more serious mistake pointed out by Mr. Gokhale in that notice is that the assessment year mentioned in that notice is not the assessment year of the 'appellants.
Their assessment Years commenced from 1st November.
This error according to Mr. Gokhale vitiated the notices issued.
Yet another complaint made by Mr. Gokhale was that though r. 32 provides that ordinarily not less than 30 days notice should be given to the assessee, only 9 days notice was given.
But this defect was found only in the notice quoted above and not in the other notices issued in,1955.
For the reasons to be mentioned presently, we see no merit in either of these contentions.
We are unable to accept the contention of Mr. Gokhale that a notice under section 11(4)(a) or 11A(1) is a condition precedent for initiating proceedings under those provisions or that it is the very foundation for the proceedings to be taken under those provisions.
The notice contemplated under r. 32 is not similar to a notice to be issued under section 34(1)(b) of the Income Tax Act, 1922.
All that sections 11(4) and 11A(1) prescribe is that before taking proceedings against an assessee under those provisions, he should be given a reasonable opportunity of being heard.
In fact, those sections do not speak of any notice.
But r. 32 prescribes the manner in which the reasonable opportunity contemplated by those provisions should be afforded to the assessee.
The period of 30 days prescribed in r. 32 is not mandatory.
The rule itself says that 'ordinarily ' not less than 30 days notice should be given.
Therefore, the only question to be decided is whether the defects noticed in those notices had prejudiced the appellants.
It may be noted that when the assessees received the notices in question, they appeared before the assessing authority, but they did not object to the validity of those notices.
They asked for time for submitting their explanation.
The time asked for was given.
Therefore, the fact that only nine days were given to them for submitting explanation could not have in any manner prejudiced them far as the mistake in the notice as regards the assessment year is concerned, the assessees kept silent about that circumstance till 1958.
It was only when they were sure that the period of limitation prescribed by section 11A had expired hey brought that fact to the notice of the assessing authority.
It is clear that the appellants were merely trying to take advantage of the mistakes that had crept into the notices.
They cannot be permitted to do so.
We fail to see why those notices are not valid in respect of the periods commencing from February 1, 1953 till 31 10 55.
We are unable to agree with Mr. Gokhale 's contention that each one of those notices should, be read separately and that we should not consider them together.
If those notices are read together as we 'think they should be, then it is clear that those notices give the appellants the reasonable opportunity contemplated by sections 11(4) '(a) and 11A(1).
In Chatturain and Others vs Commissioner Pt 'Income Tax, Bihar,(1) the: (1) 679 Federal Court held that any irregularity in issuing a notice under section 22 of the Income Tax Act, 1922 does not vitiate the proceeding that the income tax assessment proceedings commence with the issue of the notice, but the issue or receipt of the notice is, however, not the foundation of the jurisdiction of the Income Tax Officer to make the assessment or of the liability of the assessee to pay the tax.
The liability to pay the tax is :founded on sections 3 and 4 of the Income Tax Act which are the charging sections.
Section 22 and others are the machinery sections to determine the amount of tax.
The ratio of that decision applies to the facts of the present case.
In our opinion, the notices issued in the year 1955 are valid notices so far as they relate to the period commencing from February 1, 1953 to 31 10 55.
In view of our conclusion that every escapement of assessment coming within the scope of section 11(4)(a) is also an escapement of assessment under section 11 A(1), a notice issued under section 11 (4)(a) would be a vaild notice in respect of a proceeding under section 11A(1).
In the result, we hold that the assessing authority has no competence to assess the turnovers of the appellants in respect of the quarters commencing from 1 5 52 and ending with January 31, 1953 as the same is barred by time under section 11A.
We further hold that section 11(4)(a) is void as it is: violative of article 14.
We accordingly issue a direction to the respondents to refrain from assessing the appellants in respect of those turn overs.
In other respects, the appeals fail and they are dismissed.
In the circumstances of these cases, we make no order as to costs.
Bachawat, J. Sections, 11(4), 11(5) and 11 A of the C.P. and Berar Sales Tax Act, 1947 are as follows: "11(4) If a registered dealer (a) does not furnish returns in respect of any period by the prescribed date, or (b) having furnished such ;return fails to comply with any of the terms of a notice issued under subsection (2), or (c) has not regularly employed any method of accounting, or if the method employed is such that, in the opinion of the Commissioner, assessment cannot properly be made on the basis thereof, the Commissioner shall in the, prescribed manner assess the dealer to the best of his judgment: Provided that he shall not so assess him in respect of the default specified in clause (a) unless the dealer has been first given a reasonable opportunity of being beard.
680 (5) If upon information which has come into his possession, the Commissioner is satisfied that any dealer has been liable to pay tax under this Act in respect of any period and has nevertheless wailfully failed to apply for registration, the Commissioner shall, at any time within three calendar years from the ex piry of such period, after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may he prescribed to assess to the best of his judgment the amount of tax due from the dealer in respect of such period and all subsequent periods:and the Commissioner may direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed a sum not exceeding one and a half times that amount.
11 A. (1) If in consequence of any information which has come into his possession, the Commissioner is satisfied that any turnover of a dealer during any period has been under assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom the Commissioner may, at any time within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard and after making such inquiry as he considers necessary, proceed in such manner as may be prescribed to re assess or assess, as the case may be, the tax payable on any such turnover; and the Commissioner may direct that the dealer shall pay, by way of penalty in ad dition to the amount of tax so assessed, a sum not exceeding that amount.
(2) The assessment or reassessment made under subsection (1) shall be at the rate at which it would have been made, had there been no under assessment or escapement."
The Bombay Sales Tax Laws, (Validating Provisions and Amendment) Act, 1959 inserted the following sub section (3) in section 11A: "(3)(a) Nothing in sub sections (1) and (2) (i) shall apply to any proceeding (including any notice issued) under section 11, or 22A or 22B, and (ii) notwithstanding any judgment, decree or order of a court or Tribunal, shall be deemed ever to have been applicable to such proceeding or notice.
(b) The validity of any such proceeding or notice shall not be called in question merely on the ground that such proceeding or notice was inconsistent with the provisions of subsections (1) and (2).
" 681 The appellant is a registered dealer.
It failed to file returns for the periods 1 5 1952 to 31 10 1952, 1 11 1952 to 31 10 1953, 1 11 1953 to 31 10 1954 and 1 11 1954 to 31 10 1955.
The Sales Tax Officer, Non resident Circle, Nagpur issued four notices to the appellant initiating proceedings under sections 10(3), 11(4), 11A(1) and 22C(1) of the Act.
The appellant filed a writ petition in the High Court challenging the notices and asking for an order restraining the respondents from taking steps under the notices and making assessments or levying penalties in respect of the aforesaid periods.
The High Court dismissed the application.
From this order, the appellant has preferred the present appeals.
Notices under section 22C(1) can be issued only in course of any proceedings under the Act.
As no proceedings were pending against the appellant, no notice under section 22C(1) could be issued to it.
We shall presently show that no notice can be issued to a registered dealer under section 11A(1) for assessing the turnover which has escaped assessment by reason of his not filing a return.
The impugned notices so far as they were issued under sections 22C(1) and 11A(1) may be treated as surplusage and rejected.
Under section 10(3), if a registered dealer fails to furnish his return for any period within the prescribed time without any sufficient cause, the Commissioner may after giving him reasonable opportunity of being heard direct him to pay by way of penalty a sum not exceeding one fourth of the amount which may be assessed on him under section 11.
If no assessment can be made under section 11, no penalty can be levied under section 10(3).
Therefore, the point for determination is whether the impugned notices so far as they were issued under section 11(4) are valid.
The contention of the appellant is that the notices under section 11 (4) are invalid as they were not issued within three years from the expiry of the aforesaid periods.
We see no force in this contention.
Section 11(4) does not prescribe a period of limitation for the issue of a notice under it.
In Ghanshyam Das vs Regional Assistant Commissioner of Sales Tax, Nagpur(1), the Court by a majority decided with reference to section 11.(4) and section 11A, as it stood before its amendment by the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act, 1959, that a notice under section 11(4) initiates new proceedings and it also decided or to be more accurate, assumed that the period of limitation prescribed by section 11A(1) should be imported into section 11(4).
The case was decided without reference to section 11A(3) inserted by the Amending Act and is no authority on the interpretation of that sub section.
Section 11A(3) now expressly provides that nothing in section 11A(1) shall apply to any proceeding including any notice issued under section 11.
The section is retrospective in operation.
It follows that the period of (1) , 682 limitation prescribed by section 11A(1) cannot be applied to a proceeding or a notice issued under section 11(4).
There is no period of limitation prescribed for a notice or a proceeding initiated under section 11(4).
Consequently, the impugned notices issued under section 11 (4) are not barred by limitation and are not invalid.
The argument then is that section 11(4)(a) offends article 14 of the Constitution in two ways.
Firstly, it is said that it is open to the sales tax authorities to proceed at their sweet will either under section 11(4)(a) or under section IIA(1) against a registered dealer for his failure to file returns and the principle of Shree Meenakshi Mills Ltd. vs Sri A. V. Viswanatha Sastri and Another(1) is invoked.
We find no merit in this contention.
Section 11(4)(a) specially pro vides for the initiation of proceedings against a registered dealer who has not furnished returns in respect of any period by the prescribed date.
Having made this special provision, the legislature must be taken to have intended that in a case falling under section 11(4)(a) the sales tax authorities must proceed against the registered dealer under section 11(4)(a) and not under section IIA(1).
The special provision must be taken silently to exclude all cases failing within it from the purview of the more general provision.
Moreover if a statute is capable of two constructions, that construction should be given which will uphold it rather than the one which will invalidate it.
Construing sections 11(4)(a) and 11A(1) together we should, therefore, hold that the cases falling within section 11(4)(a) are excluded from the purview of section 11 A(1).
The point that there is no over lapping of sections 11(4)(a) and 11A(1) is made clearer by s.11A(3).
The decisions under section 34(1)(b) of the Indian Income tax Act, 1922 such as Maharaj Kumar Kamai Singh vs Commissioner of Incometax, Bihar and Orissa(2) and under section 14 of the Business Profits Tax Act, 1947 such as Commissioner of Income Tax vs Narsee Nagsee & Co.(2) are distinguishable.
In those Acts, there was no special provision corresponding to section 11(4) for proceeding against registered dealers who have not filed returns, and the question how far the special provisions would exclude cases within it from the purview of the more general provision could not arise.
In Ghanshyam Das 's case(3), none of the notices in question was issued under section 11A, and the Court did not say that a registered dealer could be proceeded against under section 11 A for not filing a return.
Nor did the Court consider the effect of section 11 A(3).
It is true that the majority decision held that the phrase "escaped assessment" in section 11A includes that of a turnover which has not been assessed at all because no assessment proceedings were initiated.
But having regard to the special provisions of section 11(4) read with section 11A(3), the power under section 11 A(1) as interpreted in Ghanshyam Das 's case(4) to assess turnover which escaped assessment by reason of non filing of returns must be confined to cases of (1) (2) [1959] Supp. 1 S.C.R. 10.
(3) , (4) ; 683 unregistered dealers.
As pointed out already, cases of registered dealers falling within section 11(4) are excluded from the purview of section 11A(1).
It is next said that section 11 (4) offends article 14 of the Constitution because no period of limitation is prescribed for a notice under it, whereas periods of limitation are prescribed for notices under sections IIA(L) and 11(5).
We see no merit in this contention.
The Act 'deals with registered and unregistered dealers differently in many ways.
The classification and differential treatment of re gistered and unregistered dealers are based on substantial differences having reasonable relation to the object of the Act.
A registered dealer unlike an unregistered dealer is under a statutory obligation to file returns without any notice being served upon him and to pay the full amount of tax due from him before furnishing the return (sections 10 and 12).
A dealer who has registered himself under the Act admits his liability to furnish returns whereas a dealer who has not registered himself makes no such admission.
A registered dealer has certain advantages under the Act which are denied to an unregistered dealer.
Section 2(1)(a)(ii) exempts from tax sales of a registered dealer of goods specified in his certificate of registration as being intended for use by him as raw materials in the manufacture of goods for sale by actual delivery in the State for consumption therein.
An unregistered dealer cannot get the benefit of this exemption.
Moreover, section 2(j) (a)(ii) exempts from tax sales to a registered dealer of goods de clared by him in the prescribed form as being intended for resale by him by actual delivery in the State for consumption therein.
The sales to an unregistered dealer are not so exempt.
Consequently, a registered dealer call buy his goods from the producer or the wholesaler at a cheaper price and has thus ail economic advantage over an unregistered dealer.
In the matter of penalties, sections 10(3) and 22C(1) treat the two classes of dealers on the same footing, but sections 11 (4), 11(5) and 11 A(1) treat them differently.
No penalty can be levied on a registered dealer under section 11(4) but heavy penalties may be levied on an unregistered dealer under sections 11(5) and 11A(1).
While prescribing periods of limitation for proceedings against an unregistered dealer under sections 11(5) and 11A(1), the legislature has wisely not prescribed a period of limitation for a proceeding initiated under section 11(4)(a) against a registered dealer considering that (1) the registered dealer is under a statutory obligation to file the return, (2) no penalty is leviable under section 11(4)and (3) the registered dealer is given many advantages under the Act which are denied to an unregistered dealer.
The bar of limitation in the case (if an unregistered dealer and the absence of such a bar in the case of a registered dealer cannot be regarded as unjust or discriminatory.
Questions of policy are not to be debated in this Court.
There is no compulsion on the legislature to prescribe a period of limitation in every case.
In taxing statutes the legislature has a large measure of discretion.
We cannot strike 684 down section 11(4)(a) because of some preconceived notion that the same period of limitation should be prescribed for proceedings against both registered and unregistered dealers.
In Ghanshyam Das 's case(1), Raghubar Dayal, J. at p. 459 clearly held that section 11(4) is not violative of article 14.
The majority did not dissent from this opinion.
We hold that section 11 (4) is not violative of article 14 and we uphold it.
It follows that the notices issued on July 8, 1959 under section 11(4) are valid in respect of the entire period from 1 11 1952 to 31 10 1955.
As regards the alternative contention of the respondent, that the notices issued in 1955 validly initiated, proceedings under section 11(4) for the period from 1 2 1953 to 31 10 1955 we are glad to find that the majority has accepted this contention.
The irregularities, if any, in the notices do not invalidate them.
However, for the reasons already mentioned, we are of opinion that the impugned notices issued on July 8, 1959 are valid.
In the result, the appeals are dismissed with costs.
ORDER In accordance with the opinion of the majority these appeals are partly allowed with respect to turn over from 1 5 1952 to 31 1 1953.
In other respects the appeals are dismissed.
No order as to costs. | Under s.10(1) of the Central Provinces and Berar Sales Tax Act 1947 every dealer required so to do by the Commissioner by notice, and every registered dealer, shall furnish such returns by such dates and so such authority as may be prescribed, and r.19 of the Rules framed under the Act provides that every registered dealer should furnish quarterly returns accompanied by a treasury challan in proof of payment of the tax payable.
If the registered dealer does not so furnish his return, the Commissioner may, after giving the dealer a reasonable opportunity assess him to the best of his judgment (4)(a).
Under s.11(4) (a).
Rule 32 prescribes that ordinarily not less than 30 days notice should be given to an assessee for submitting his explanation before action is taken under s.11(4)(a).
In 1953, s.11A was added to the Act.
Under s.11A(1) if in consequence of any information which has come into his possession, the other Commissioner is satisfied that any turnover of a dealer has escaped assessment, the Commissioner may, within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed to re assess the tax payable on any such turnover and also direct the dealer to pay a penalty.
In 1959, s.11A(3) was added by which, nothing in s.11A(1) shall apply to any proceeding including any notice under s.11, that is, the period of limitation of 3 years mentioned in s.11A(1) shall not apply to a proceeding under s.11(4)(a) on best judgment basis.
The appellants were registered dealers.
Their assessment year was from 1st November to 31st October.
They submitted their quarterly returns upto 30th April 1952.
Since no returns were submitted thereafter, on 13th September 1955, the assessing authority issued a notice with respect to the period 1st January 1953 to 31st December 1953 calling upon them to show cause why action should not be taken against them under s.11(4) (a).
A similar notice was issued on 27th October 1955 for the period 1st January 1954 to 31st December 1954, and on 7th July 1956, for the period 1st January 1955 to 31st December 1955.
The appellants repeatedly took time for submitting their explanation.
In 1958, fresh notices were issued for L/P(N) 7SCI (3)(a) 662 the calendar years1952 to 1955 and the appellants raised the objection, for the first time, that their assessment year was not the calendar year, but 1st November to 31st October.
In view of that objection, the first respondent issued another set of notices on 8th July 1959 for the periods 1st May 1952 to 31st October 1952, 1st November 1952 to 31st October 1953, 1st November 1953 to 31st October 1954 and 1st November 1954 to 31st October 1955 respectively.
The appellants contended that those notices were barred by the 3 year period of limitation under s.11A(1), but the assessing authority assessed the appellants on best judgment basis under section 11 (4) (a).
The appellants thereupon filed writ petitions in the High Court challenging the validity of the notices and the order of assessment, but the petitions were dismissed.
In appeals to this Court, the appellant contended that: (1) Section 11(4), (a) read with s.11A(3) contravenes article 14 of the Constitution, because, a registered dealer who had failed to submit his return could be proceeded against either under s.11(4)(a) or s.11A(1), but, whereas s.11A(1) provides a 3 year period of limitation, a proceeding under section 11(4)(a) could be initiated at any time in view of s.11A(3); (2) the notices of 1959 were barred by time; and (3) the notices of 1955 and 1956 were not valid, because, (a) the issue of one notice for several quarters was contrary to law, (b) that portion of the printed notice which said that the appellants had failed to furnish the return as required by a notice in that behalf served on them under s.10(1) did not apply to the appellants as no notice under s.10(1) had been given to them, (c) the assessment year mentioned in the notice was the calendar year which was not the assessment year of the appellants, and (d) though r. 32 provides that ordinarily not less than 30 days notice should be given to the assessee for submitting his explanation, the first notice gave to the appellants only 9 days time.
Held: (Per Wanchoo C. J., Mitter and Hegde, JJ.) (1) Section 11(4) (a) is void as it is violative of article 14.
The expression 'dealer ' in s.11A(1) includes both registered and unregistered dealers, and it cannot be contended that dealers are classified into registered and unregistered dealers, the former coming under s.11(4)(a) and the latter under s.11A(1).
To be a valid classification, it must not only be founded on an intelligible differential which distinguishes persons and things that are grouped together from others left out of the group, but that differentia must have a reasonable relation to the object sought to be achieved.
In the present case, both s.11(4)(a) and section 11A(1) are concerned with taxing escaped assessments, and judged from this object sought to be achieved by the Act, the classification of dealers into registered and unregistered dealers is not reasonable.
Therefore, even registered dealers are covered by section 11A(1).
As the 'information ' contemplated by s.11A(1) need not be from outside sources but could be gathered by the assessing authority from his own records, his knowledge of the facts that the appellants had not submitted quarterly returns and treasury challans and that they were notassessed to tax with respect to the turnovers in question constituted 'information ' to the assessing authority from which he could be satisfied that the turnovers had escaped assessment.
It would thus be open to the assessing authority to proceed against the appellants either under s.11(4)(a) or s.11A(1).
But as they were proceeded against under section 11(4)(a), they could not get the benefit of the limitation prescribed under section 11A(1).
It follows that section 11(4)(a) has become a discriminatory provision in view of section 11A(3), [672 B; 674 D E; 675 H; 676 A G].
663 Ghanshyam Das vs Regional Assistant Commissioner of Sales tax, Nagpur ; and Suraj Mall Mohta & Co. vs A, V. Visvanatha Sastri & Anr. ; , followed.
Maharaj Kumar Kamal Singh vs Commissioner of Income tax, Bihar & Orissa [1959] Supp. 1 S.C.R. 10, Commissioner of Incometax, Bombay City vs M/s. Narsee Nagsee & Co. Bombay, Salem Provident Fund Society Ltd. vs C. I, T. Madras, and United Mercantile Co. Ltd. vs Commissioner of Income tax, Kerala, referred to.
(2) But s.11(4)(a) is severable from the rest of the Act and its severance does not affect the implementation of the other provisions of the Act.
Therefore, the validity of the notices should be tested under s.11A(1).
So tested, the notices of 1959 are all barred by the 3 year period of limitation.
[676 G H].
(3) Since there was no valid notice for the period 1st May 1952 to 31st October 1952, there could be no assessment in respect of that period.
As regards the quarter 1st November 1952 to 31st January 1953 also, there was no valid notice.
The notice issued on 13th September 1955, no doubt refers to the period 1st January 1953 to 31st January 1953, but that is only a part of the quarter.
As a quarter is a unit in itself and there should be a notice for the entire quarter, the proceeding in respect of the quarter from 1st November 1952 to 31st January 1953 is also barred by limitation [677 E F].
But the notices issued in 1955 and 1956 are valid notices in so far as they relate to the period 1st February 1953 to 31st October 1955.
Any irregularity in the issue of the notices does not vitiate the proceeding, because, the liability to pay tax is founded on the charging sections.
[680 B C].
Chatturam & Ors.
vs C.I.T. Bihar, ; , applied.
Further, (a) The issue of one notice for several quarters is not contrary to law.
[678 E].
State of Orissa and Anr.
vs M/s. Chakobhai Chelabhai & Co. ; , followed.
(b) The assessing authority, by mistake, had failed to strike out the portion in the printed form which was inapplicable to the appellants who were registered dealers and on whom no notice need be served to furnish a return.
But this circumstance could not have prejudiced the appellants and such a mistake does not vitiate the notice.
[678 H].
Chakobhai Chelabhai 's case; , , followed.
(c) The mistake as regards the assessment year in the notices does not render the notices invalid.
The assesses deliberately kept silent and when they felt that the period of limitation prescribed by section 11A had expired, brought the fact to the notice of the authority.
The assesses were not prejudiced and could not be permitted to take advantage of such a mistake.
[679 G H].
(d) Rule 32 prescribes that ordinarily 30 days ' notice should be given.
Therefore, the period is not mandatory.
All that ss.11(4) and 11A require is that an assessee should be given a reasonable opportunity before he is proceeded against.
Since, in the present 664 A case, the appellants appeared before the assessing authority and did not object to the validity of the notices but asked for sub mitting their explanation, and as the time asked for was given, the appellants had a reasonable opportunity, for submitting their explanation.
[679 D G].
(Per Bachawat and Ramaswami JJ.) (1) Section 11(4) is not violative of article 14.
Construing ss.11(4)(a) and 11A(1) together it must be held that cases falling within s.11(4)(a) are excluded from the purview of S.11A(1).
Section 11(4)(a) specially provides for the initiation of proceedings against a registered dealer.
Having made this special provision, the legislature must be taken to have intended that the sales tax authorities must proceed against.
a registered dealer under s.11(4)(a) and not under s.11A(1).
[683 C B].
The classification and differential treatment of registered and unregistered dealers are based on substantial difference having a reasonable relation to the object of the Act.
The legislature did not prescribe a period of limitation for a proceeding initiated under section 11(4)(a) against a registered dealer, because, (i) the registered dealer is under a statutory obligation to file a return, (ii) no penalty is leviable under s.11(4) and (iii) the registered dealer is given many advantages under the Act which are denied to an unregistered dealer.
Therefore, the bar of limitation in the case of an unregistered dealer and the absence of such a bar in the case of a registered dealer cannot be regarded as unjust or discriminatory.[684 B, G H].
Ghanshyam Das vs Regional Assistant Commissioner of sales Tax Nagpur, [1964]4 S.C.R. 436, Maharaj Kumar Kamal Sing vs Commissioner of Income tax, Bihar & Orissa, [1959] Supp. 1 S.C.R. 10 and Commissioner of Income tax vs Narsee Nagsee & Co. , explained.
(2) Section 11A(3) expressly provides that nothing in section 11 A(1) shall apply to any proceeding including any notice under section 11 and the section is retrospective.
It follows that the period of limitation provided by s.11A(1) cannot be applied to a proceeding or notice under section 11(4).
Consequently, the impugned notices of 1959, issued under s.11(4) are not barred by limitation and are not invalid [682 H; 683 A].
Ghanshyam Das 's Case; , , referred to (3) Even the notices issued in 1955 and 1956 initiated proceedings validly under section 11(4) for the period from 1st February 1953 to 31st October 1955, as the irregularities in the notices did not invalidate them.
[685 B C]. |
itions Nos. 53, 100, 101, 105 and 106 of 1967.
Petitions under article 32 of the Constitution of India for the enforcement of the fundamental rights.
M. C. Setalvad, A. V. Koteswara Rao, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the petitioners (in W. P. No. 53 of 1967).
N. C. Chatterjee, A. V. Koteswara Rao, K. Rajendra Chau dhuri and K. R. Chaudhuri, for the petitioners (in W.P. No. 100 of 1967).
A. V. Koteswara Rao, K. Rajendra Chaudhuri and, K. R. Chaudhuri, for the petitioners (in W.P. No.101 of 1967).
K. R. Chaudhuri and K. Rajendra Chaudhuri, for the peti tioners (in W.P. Nos. 105 and 106 of 1967).
C. K. Daphtary, Attorney General and A. V. Rangam, for he respondents (in W.P. No. 53 of 1967).
P. Ram Reddy and A. V. Rangam, for the, respondents (in V. Ps.
No. 100, 101, 105 and 106 of 1967).
Sachin Chaudhury, G. L. Sanghi and O. C. Mathur, for the intervener (in W.P. No. 53 of 1967).
The Judgment of the Court was delivered by Bachawat, J.
In all these writ petitions under article 32 of the the petitioners ask for an order declaring that section 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961 (Andhra Pradesh Act No. 45 of 1961) is unconstitutional and ultra vires and a direction prohibiting the respondents from levying tax under section 21 and to refund the tax already collected.
Section 21 of the Act is in these terms: "21(1) The Government may, by notification, levy a tax at such rate not exceeding five rupees per metric tonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory.
(2) The Government may, by notification, remit in whole or in part such tax in respect of cane used, or intended to be used in a factory for any purpose specified in such notification.
(3) The Government may, by notification, exempt from the payment of tax under this section (a) any new factory which, in the opinion of the Government has substantially expanded, to the extent of such expansion, for a period not exceeding two years from the date of completion of the expansion.
P(N)7SCI 6 708 (4) The tax payable under sub section (1) shall be levied and collected from the occupier of the factory in such manner and by such authority as may be prescribed.
(5) Arrears of tax shall carry interest at the rate of nine per cent per annum.
(6) If the tax under this section together with the interest, if any, due thereon, is not paid by the occupier of a factory within the prescribed time, it shall be recoverable from him as an arrear of land revenue." Section 2(1) defines a factory which means "any premises including the precincts thereof, wherein twenty or more workers are working or were working on any day during the preceding twelve months and in any part of which any manufacturing process connected with the production of sugar by means of vacuum pans in being carried on or is ordinarily carried on with the aid of mechanical power.
Section 2(m) defines the occupier of a factory.
B: Ordinance No. 1 of 1967 which was replaced by Act No. 4 on 1967, the following new sub section (I A) was inserted and other consequential amendments were made in section 21 of the principal Act "(1 A) The Government may, by notification, levy a tax at such rate, not exceeding three.
rupees and fifty paise per metric tonne, as may be prescribed on the purchase of cane required for use, consumption or sale in a khandsari unit".
Also the following sub sections (kk) and (kkk) were inserted in section 2 of the principal Act: "(kk) 'khandasari sugar ' means sugar produced by open pan process in a khandasari unit from sugarcane juice, or from rab or gur or both, containing more than eighty per cent sucrose; (kkk) 'khandasari unit ' means a unit engaged or ordinarily engaged in the manufacture of khandasari sugar and includes a bel;" It may be mentioned that sales and purchases of sugarcane a exempt from tax under the Andhra Pradesh General Sales Tax Act, 1957.
The petitioners own sugar factories as defined in 2(1).
Their agents are the occupiers of the factories as defined in section 2(m).
They purchased cane from canegrowers within their respective factory zones.
The State Government had issued notifications levying tax under section 21.
For the last several years the petitioners have paid the tax on their purchases of sugarcane and further demands are being made on them for payment of the tax They challenge the vires and the , constitutionality of section 21 of various grounds.
The principal submissions were made by M. M. C. Setalvad who appeared in Writ Petition No. 53 of 196 709 and his arguments were adopted by counsel appearing in the other petitions.
Mr. N. C. Chatterjee who appeared in Writ Petition No. 100 of 1967 raised a few additional contentions.
The submission of Mr. Setalvad is that section 21 so far as it levies a tax on the purchases of sugarcane by or on behalf of the petitioners from the canegrowers in their respective factory zones is ultra vires the powers of the legislature under Entry No. 54, List 11, Sch.
VII of the Constitution in the light of the decision in State of Madras vs Gannon Dunkerley & Co.(1).
Now, in Gannon Dunkerley 's case(1), the actual decision was that the legislature had no power under List II, Entry 48, Sch.
VII of the Government of India Act, 1935 to impose a tax on the supply of materials under an entire and indivisible contract for construction of buildings.
But the Court also held that the phrase "sale of goods" in the Entry must be interpreted in the legal sense which it had in the Indian Sale of Goods Act, that the Provincial Legislature had no power to tax a transaction which was not a sale of goods in that sense and that in order to constitute a sale there must be an agreement for sale of goods for a price and the passing of property therein pursuant to such an agreement.
Ventakarama Aiyar, J. laid at pp.
397 398: "Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods which of course presupposes capacity to contract, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods.
Unless all these elements are present, there can be no sale.
" in the light of this decision, the expression "sale of goods" in Entry 54, List II, Sch.
VII of the Constitution must be given the ame interpretation.
On a parity of reasoning, to constitute a purchase of goods" within this Entry, there must be an agreement for purchase of goods and the passing of property therein pursuant to such an agreement.
The question, therefore, is whether the purchases by or on behalf of the petitioners from the cane growers in their respective factory zones were made under agreements of purchase and, sale.
It appears that the Cane Commissioner is empowered under s.15 of Act No. 45 of 1961 to declare any area as the factory one for the purpose of supply of cane to a factory during a particular crushing season.
Under section 16(1), on the declaration of the factory zone the occupier of the factory is bound to purchase such quantity of cane grown in that area and offered for sale to the factory (1) ; 710 as may be determined by the Cane Commissioner in accordance with the provisions of the schedule.
Section 16(2) prohibits the the canegrowers in a factory zone from supplying or selling cane to any factory or other person otherwise than in accordance with the provisions of the schedule.
Section 28(2)(1) empowers the Government to make rules providing for the form of agreement to be entered into under the provisions of the Act.
Rule 20 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Rules, 1951 framed under the Act provides that a canegrower or a canegrower 's co operative society may within 14 days of the order declaring an area as the factory zone or such extended time as may be fixed by the Cane Commissioner, offer in Form No. 2 to supply cane grown in that area to the occupier of the factory and such occupier of the factory within 14 days of the receipt of the offer shall enter into an agreement in Form No. 3 or Form No. 4 with the canegrower or the canegrower 's co operative society as the case may be for the purchase of the cane offered.
Form No. 3 is the statutory form of agreement with a canegrower.
By the agreement in Form No. 3 the occupier of the factory agrees to buy and the canegrower agrees to sell during the crushing season certain sugarcane crop grown in the area at the minimum price noticed by the Government from time to time upon the terms and conditions mentioned in the agreement.
The agreement contains an arbitration clause and is signed by or on behalf of the occupier of the factory and the canegrower.
The agreement in Form No. 4 with a canegrower 's co operative society is on the same lines.
All the terms and conditions of the agreements and the mode of their performance are fixed and regulated by the Act, the Rules and orders made under the Act.
Contravention of the provisions of the Act or of any rule or order made under the Act is punishable under section 23.
The minimum price of sugarcane is fixed under the Sugarcane Control Order, 1966.
The learned Attorney and Mr. Ram Reddy attempted to argue that the occupier of the factory has some option of not buying from the canegrower and some freedom of bargaining about the terms and con ditions of the agreements.
But after having read all the relevant provisions of the Act and the Rules, they did not pursue this point.
We are satisfied that under the provisions of Act No. 45 of 1961 And the Rules framed thereunder, a canegrower in a factory zone is free to sell or not to sell his sugarcane to the factory.
He may consume it or may process it into jaggery and then sell the finished product.
But if he offers to sell his cane, the occupier of the factory is bound to enter into an agreement with him on the prescribed terms and conditions and to buy cane pursuant to he agreement in conformity with the instructions issued by the Cane Commissioner.
The submission of the petitioners is that as ,hey or their agents are compelled by law to buy cane from the 711 canegrowers their purchases are not made under agreements and are not taxable under Entry No. 54, List 11 having regard to Gannon Dunkerley 's case(1).
This contention requires close examination.
Under section 4(1) of the Indian , a con tract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.
By section 3 of this Act, the provisions of the apply to contracts of sale of goods save in so far as they are inconsistent with the express provisions of the later Act.
Section 2 of the provides that when one person signifies to another his willingness to do or to abstain from doing anything with a view to obtaining the assent of the other to such act or abstinence, he is said to make a proposal.
When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.
A proposal when accepted becomes a promise.
Every promise and every set of promises forming the consideration for each other is an agreement.
There is mutual assent to the proposal when the proposal is accepted and in the result an agreement is formed.
Under section 10, 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 by the Act expressly declared to be void,.
Sec tion 13 defines consent.
Two or more persons are said to consent when they agree upon the same thing in the same sense.
Section 14 defines free consent.
Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake as defined in sections 15 to 22.
Now, under Act No. 45 of 1961 and the Rules framed under it, the canegrower in the factory zone is free to make or not to make an offer of sale of cane to the occupier of the factory.
But if he makes an offer, the occupier of the factory is bound to accept it.
The resulting agreement is recorded in writing and is signed by the parties.
The consent of the occupier of the factory to the agreement is not caused by coercion, undue influence, fraud, mis representation or mistake.
His consent is free as defined in section 14 of the though he is obliged by law to enter into the agreement.
The compulsion of law is not coercion as defined in section 15 of the Act.
In spite of the compulsion, the agreement is neither void nor voidable.
In the eye of the law, the agreement is freely made.
The parties are competent to contract The agreement is made for a lawful consideration and with a lawful object and is not void under any provisions of law.
The agreements are enforceable by law and are contracts of sale of sugarcane as defined in section 4 of the Indian .
The purchases of sugarcane under the agreement can be taxed by the State legislature under Entry 54, List 11.
(1) ; 712 Long ago in 1702, Holt, C.J. said in Lane vs Cotton(1): "When a man takes upon himself a public employment, he is bound to serve the public as far as this employment goes, or an action lies against him for refusing.
" The doctrine that one who takes up a public employment is bound to serve the public was applied to innkeepers and common carriers.
Without lawful excuse, an innkeeper cannot refuse to receive guests at his inn, and a common carrier cannot refuse to accept goods offered to him for carriage.
See Halsbury 's Laws of England, 3rd Edn., Vol. 4, article 375 and Vol.
21, article 938.
A more general application of the doctrine was arrested by the growth of the principle of laissez faire which had its heyday in the.
midnineteenth century.
Thereafter, there has been a gradual erosion of the laissez faire concept.
It is now realised that in the public interest, persons exercising certain callings or having monopoly or near monopoly powers should sometimes be charged with the duty to serve the public, and, if necessary, to enter into contracts.
Thus, section 66 of the Indian Railways Act, 1890 compels the railway administration to supply the public with tickets for travelling on the railway upon payment of the usual fare.
Section 22 of the compels a licensee to supply electrical energy to every person in the area of supply on the usual terms and conditions.
Cheshire and Fifoot in their Law of Contract, 6th Edn., p. 23 observe that for reasons of social security the State may compel persons to make contracts.
One of the objects of Act No. 45 of 1961 is to regulate the purchase of sugarcane by the factory owners from the canegrowers.
The canegrowers scattered in the villages had no real bargaining power.
The factory owners or their combines enjoyed a near monopoly of buying and could dictate their own terms.
In this unequal contest between the canegrowers and, the factory owners, the law stepped in and compelled the factory to enter into contracts of purchase of cane offered by the canegrowers on prescribed terms and conditions.
In The Indian Steel & Wire Products Ltd. vs The State of Madras(2), the Court held that.
sales of steel products authorised by the Controller under cls.
4 and 5 of the Iron and Steel (Control of Production and Distribution) Order, 1941 were eligible to tax under Entry 54, List 11.
The Court found that the parties had entered into contracts of sale though in view of the Order the area of bargaining between the buyer and the seller was greatly reduced.
Hegde, J. speaking for the Court said that as a result of economic compulsions and changes in of the political outlook the freedom to contract was now being confined gradually to narrower and narrower limits.
We have here a case where one party (1); , (2) ; 713 to a contract of sale is compelled to enter into it on rigidly prescribed terms and conditions and has no freedom of bargaining.
But the contract, nonetheless, is a contract of sale.
In Kirkness vs John Hudson & Co. Ltd.,(1) the House of Lords by a majority held that a compulsory vesting of title of the company 's railway wagons in the British Transport Commission under section 29 of the Transport Act, 1947 was not a sale within the meaning of the phrase "is sold" in section 17 of the Income tax Act, 1945.
Under section 29, there was a compulsory taking of property.
The assent of the company to the taking was not required by statute.
By force of law, the property of the company was taken without its assent.
There was no offer, no acceptance and no mutual assent and no contract resulted.
The House of Lords held that mutual assent was an element of a transaction of sale.
In Gannon Dunkerley 's case(1), the Court approved of this principle and rejected the argument of counsel that an involuntary transfer of title as in Kirkness 's case(2) was a sale within the meaning of the legislative Entry.
But the Court did not say that if one party was free to make an offer of sale and the other party was obliged by law to accept it and to enter into an agreement for purchase of the goods, a contract of sale did not result.
In the present case, the seller makes an offer and the buyer accepts it.
The parties then execute and sign an agreement in writing.
There is mutual assent and a valid contract, though the assent of the buyer is given under compulsion of statute.
Setalvad relied on the following passage in the Law of Contract by G.H. Treitel, at p. 5: "Where the legislation leaves no choice at all to one party, the transaction is not a contract.
" But the author does not cite any authority in support of the proposition.
, He adds that even a compulsory disposition of property may be treated as contract for the purpose of a particular statute and cites the case of Ridge Nominees vs I.R.C.(3).
There, the Court distinguishing Kirkness 's case(3) held that the compulsory transfer of shares of a dissenting shareholder by a person "authorised to make the transfer on his behalf under section 209 of the Companies Act, 1948 corresponding to section 395 of our was having regard to the machinery created by the section a conveyance on sale within section 54 of the Stamp Act, 1 91.
The Lord Justices gave separate opinions.
It is worthwhile quoting the opinion of Donovan, L. J. who said: "When the legislature, by section 209 of the Companies Act, 1948, empowers the transferee company to appoint an agent on behalf of a dissenting shareholder for the purpose of executing a transfer of his shares (1) (2) ; (3) 714 against a price to be paid to the transferor company and held in trust for the dissenting shareholder, it is clearly ignoring his dissent and putting him in the same position as if he had assented.
For the purpose of considering whether this results in a sale, one must, I think, bear that situation in mind, and regard, the dissent of the shareholder as overridden by an assent which the statute imposes upon him, fictional though this may be.
in the context of section 209 the transfer becomes in law a conveyance on sale.
This conclusion, in my opinion, does not run counter to what was said in the House of Lords in Kirkness (Inspector of Taxes) vs John Hudson & Co. Ltd.,(1), where, in terms of the statute there under consideration, property belonging to other persons was declared to vest on a specified date in the Transport Commission against payment of compensation.
This may be no more than a difference of machinery, but machinery may make the very difference between a sale and a mere expropriation against compensation. "Lord Simonds, I venture to think, implies as much when he says he gets no assistance from the cases decided under the Stamp Acts.
" In M/s. New India Sugar Mills Ltd., vs Commissioner of Sales Tax, Bihar(2), the Court by a majority held that the supply of sugar by a sugar factory to a Provincial Government in obedience to the directions of the Sugar Controller given under the Sugar and Sugar Products Control Order, 1946 was not a sale taxable under List II, Entry 48, Sch.
VII of the Government of India Act, 1935.
Mr. Setalvad placed strong reliance on the fol lowing passage in the judgment of Shah, J. at pp.
469 470: "A contract of sale between the parties is therefore a pre requisite to a sale.
The transactions of despatches of sugar by the assessees pursuant to the directions of the Controller were not the result of any such contract of sale.
It is common ground that the Province of Madras intimated its requirements of sugar to the Controller, and the Controller called upon the manufacturing units to supply the whole or part of the requirement to the Province.
In calling upon the manufacturing units to supply sugar, the Controller did not act as an agent of the State to purchase goods: he acted in exercise of his statutory authority.
There was mani festly no offer to purchase sugar by the Province, and no acceptance of any offer by the manufacturer.
The manufacturer was under the Control Order left no volition: he could not decline to carry out the order; if he (1) (2) [1963] Supp. 2 S.C.R. 459, 469.
715 did so he was liable to be punished for breach of the order and his goods were liable to be forefeited.
The Government of the Province and the manufacturer had no opportunity to negotiate, and sugar was despatched pursuant to the direction of the Controller and not in acceptance of any offer by the Government." Divorced from the context, this passage gives some support to the contention that there can be no contract if the acceptance of the offer is made under compulsion of a direction given by a statutory authority.
But the passage must be read with the facts of the case.
By cl. 3 of the Sugar and Sugar Products Control Order, 1946, producers of sugar were prohibited from disposing of sugar except to persons specially authorised in that behalf by the Controller to acquire sugar on behalf of certain Governments.
Clause 5 required every producer or dealer to comply with the directions issued by the Controller regarding production, sales, stocks and distribution of sugar.
Clause 6 authorised the Controller to fix the price of sugar.
Clause 7(1) authorised the Controller to allot quotas of sugar for any Province and to issue directions to any producer or dealer for the supply of the sugar specifying the price, quantity and type or grade of the sugar and the time and manner of supply.
Contravention of the directions entailed forfeiture of stocks under cl. 11 of the Order and was punishable under r. 81(4) of the Defence of India Rules, 1939.
The admitted course of dealings between the parties was that the Governments of the consuming States used to intimate to the Sugar Controller their requirement of sugar and the factory owners used to send to him statements of their stocks of sugar.
On a consideration of the requisitions and the statements of stock, the Controller used to make allotments.
The allotment order used to be addressed by the Controller to the factory owner, directing him to supply sugar to the Government in question in accordance with the latter 's despatch instructions.
A copy of the allotment order used simultaneously to be sent to the Government concerned and the latter then used to send to the factory detailed despatching instructions.
In these circumstances, Kapur and Shah, JJ.
(Hidayatullah, J. dissenting) held that by giving intimation of its requirement of sugar to the Controller and applying for allotment of sugar, the Government of Madras did not make any offer to the manufacturer.
The direction of the Controller to the manufacturer to supply sugar to the Government was given in the exercise of his statutory authority and was not the communication of any offer made by the Government.
The despatch of the goods in compliance with the directions of the Controller was not the acceptance by the manufacturer of any offer, nor could it be deemed to be an offer by the manufacturer to supply goods.
On the, special facts of that case, the majority decision was that there was no offer and acceptance and no contract resulted.
That decision should not be 716 treated as an authority for the proposition that there can be no contract of sale under compulsion of a statute.
It depends upon the facts of each case and the terms of the particular statute regulating the dealings whether the parties have entered into a contract of sale of goods.
Under Act No. 45 of 1961, a canegrower makes an offer to the occupier of the factory directly and the latter accepts the offer.
The parties then make and sign an agreement in writing.
There is thus a direct privily of contract between the parties.
The contract is a contract of sale and pur chase of cane, though the buyer is obliged to give his assent under compulsion of a statute.
The State Legislature is competent to tax purchases of canes made under such a contract.
Mr. Setalvad submitted that there can be no levy of a pur chase tax with reference to the tonnage of the cane.
We cannot accept this contention.
Usually the purchase tax is levied with reference to the price of the goods.
But the legislature is competent to levy the tax with reference to the weight of the goods purchased.
The contention of Mr. Chatterjee that a purchase tax must be levied with reference to the turnover only is equally devoid of merit.
Where the purchase tax is levied on a dealer, the levy is usually with reference to his turnover, which normally means the aggregate of the amounts of purchase prices.
But the tax need not necessarily be levied on a dealer or by reference to his turnover.
It may be levied on the occupier of a factory by reference to the weight of the goods purchased by him.
Mr. Chatterjee next submitted that a purchase tax must be levied on goods generally, and there can be no purchase tax with reference to their subsequent use, consumption or sale.
He based his argument on paragraphs 17 to 20.
III, Vol.
III of the Report of the Taxation Enquiry Committee.
There, the Committee while discussing the comparative merits of sales tax in relation to customs, excise and octroi, pointed out that sales tax was a major source of revenue and could be applied to the generality of goods, while customs, excise and octroi could be applied to only a limited portion of the industrial output of the country.
The Committee did not express any opinion on the scope of List II, Entry 54.
Under that Entry, the State legislature is not bound to levy a tax on all purchases of cane.
It may levy a tax on purchases of cane required for use, consumption or sale in a factory.
The legislature is competent to tax and also to exempt from payment of tax sales or purchases of goods required for specific purposes.
Other instances of special treatment of goods required for particular purposes may be given.
Section 6 and Sch.
1, item 23 of the Bombay Sales Tax Act, 1946 levy tax on fabrics and articles for personal wear.
Section 2(j)(a)(ii) of the C.P and Berar Sales Tax Act, 1947 exempts sales of goods intended for use by a registered dealer as raw materials for the manufacture of goods.
717 Mr. Chatterjee submitted that the tax levied under section 21 was a use tax and referred to McLeod vs Dilworth & Co.(1) and C. G. Naidu & Co. The State of Madras(2).
He argued that the State legislature could not levy a use tax which was essentially different from a purchase tax.
The assumption of counsel that section 21 levies a use tax is not well founded.
The taxable event under section 21 is the purchase of goods and not the use or enjoyment of what is purchased.
The constitutional implication of a use tax in American law is entirely irrelevant.
The observation in the Madras case that the Explanation to article 286(1)(a) of the Constitution conferred, a power on the State legislature to levy a use tax is erroneous.
The Explanation fixed the situs of certain sales.
It did not confer upon the legislature any power to levy a use tax.
To appreciate another argument of Mr. Chatterjee, it is necessary to refer to a few facts.
It appears that paragraph 21 of the Bill published in the Gazette on March 3, 1960 preliminary to the passing of Act No. 45 of 1961 provided for a levy of a cess on the entry of cane into the premises of a factory for use, consumption or sale therein.
On December 13, 1960, this Court in Diamond Sugar Mills Ltd. and Another vs The State of Uttar Pradesh and Another(3) struck down a similar provision in the U.P. Sugarcane Cess Act, 1956 on the ground that the State legislature was not competent to enact it under Entry 52, List II as the premises of a factory was not a local area within the meaning of the Entry.
Having regard to this decision, paragraph 21 of the Bill was amended and section 21 in its present form was passed by the State Legislature.
The Act was published in the Gazette on December 30, 1961.
Mr. Chatterjee submitted that in this context the levy under section 21 was really a levy on the entry of goods into a factory for consumption, use or sale therein.
We are unable to accept this contention.
As the proposed tax on the entry of goods into a factory was unconstitutional, paragraph 21 of the original Bill was amended and section 21 in its present form was enacted.
The tax purchase of goods.
The taxable event is the purchase of cane for use, consumption or sale in a factory and not the entry of cane into a factory.
As the tax is not on the entry of the cane into a factory, it is not payable on cane cultivated by the factory and entering the factory premises.
Mr. Setalvad submitted that section 21 impeded free trade, com merce and intercourse and offended article 301 of the Constitu tion and relied on the decision in Firm A. T. Mehtab Majid & (1) ; (2) A.I.R. 1953 Mad.
116, 127 128, (3) ; 718 Co. vs State of Madras(1).
In that case, the Court held that r. 16(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 discriminated against imported hides or skins which had been purchased or tanned outside the State by levying a higher tax on them and contravened article 304(a) of the Constitution.
At p. 442, Raghubar Dayal, J. said: "It is therefore now well settled that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulatory measures.
Sales tax of the kind under consi deration here, cannot be said to be a measure regulating any trade or a, compensatory tax levied for the use of trading facilities.
Sales tax, which has the effect of discriminating between goods of one State and goods of another, may affect the free flow of trade and it will then offend against article 301 and will be valid only if it comes within the terms of article 304(a).
" That case decides that a sales tax which discriminates against goods imported from other States may impede the free flow of trade and is then invalid unless protected by article 304(a).
But the tax levied under section 21 does not discriminate against any imported cane.
Under section 21, the same rate of tax is levied on purchases of all cane required for use, consumption or sale in a factory.
There is no discrimination between cane grown in the State and cane imported from outside.
As a matter of fact, under the Act the factory can normally buy only cane grown in the factory zone.
A non discriminatory tax on goods does not offend article 301 unless it directly impedes the free movement or transport of the goods.
In Atiabari Tea Co. Ltd., vs The State of Assam and others(2).
Gajendragadkar, J. speaking for the majority said: "We are, therefore, satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by article 301 a rational and workable test to apply would be: Does the impugned restriction ope rate directly or immediately on trade or its movement?.
It is the free movement of the transport of goods from one part of the country to the other that is intended to be saved, and if any Act imposes any direct res trictions on the very movement of such goods it attracts the provisions of article 301, and its validity can be sustained only if it satisfies the requirements of article 302 or article 304 of Part XIII.
" (1) [1963] Supp.
2 S.C.R. 435.
(2) ; , 860 861. 719 This interpretation of article 301 Was not dissented from in Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan(1).
Normally, a tax on sale of goods does not directly impede the free movement or transport of goods.
Section 21 is no exception.
It does not impede the free movement or transport of goods and is not violative of article 301.
Mr. Setalvad next submitted that section 21 offended article 14 of the Constitution in several ways.
It was argued that section 21 read with section 2(e) discriminated between producers of sugar using the vacuum pan and open pan processes.
Under section 2 1, as it stood before its amendment by Act No. 4 of 1967 tax was levied on purchases of cane by factories producing sugar by means of vacuum pans but purchases of cane by khandasari units producing khandasari sugar by the open pan process were entirely exempt from the tax.
Even the amended section 21 levies a lower rate of tax on the purchases of cane by khandsari units.
It was also argued that there was discrimination in favour of producers of jaggery by exempting their purchases of cane from payment of the tax.
But the affidavits filed on behalf of the respondents show that factories producing sugar by means of vacuum pans and khandasari units producing sugar by the open pan processes form distinct and separate classes.
The industry using the vacuum pan process is in existence since 1932 33.
No tax was levied on this industry until 1949.
In 1949 when the industry became well established, tax was levied on it for the first time by section 14 of the Madras Sugar Factories Control Act, 1949.
The khandasari units carry on a small scale industry.
They are of recent origin in the State of Andhra Pradesh.
Until 1967, this industry was exempt from the levy.
When the industry came to be somewhat established by 1967 a smaller rate of tax was levied on it.
In 1965 66, factories adopting the vacuum pan process bought over 32 lakh tonnes of cane while the khandasari sugar units in the State bought about 2.70 lakh tonnes of cane.
The manufacture of jaggery has no resemblance to the manufacture of sugar by the vacuum pan or the open pan system.
It is a cottage industry wherein individual canegrowers process their cane into jaggery and market it as a finished product.
Having regard to the affidavits, we are satisfied that the differential treatment of the factories producing sugar by means of vacuum pans, khandasari units producing sugar by.
the open pan process and cane growers using cane for the manufacture of jaggery is reasonable and has a rational relation to the object of taxation.
There are marked differences between the three classes of users of cane and their capacity to pay the tax.
The legislature could reasonably treat the three sets of users of cane differently for purposes of levy.
(1) [1963] 1 S.C.R. 491, 533. 702 It was next argued that the power under section 21(3) to exempt new factories and factories which in the opinion of the Government have substantially expanded was discriminatory and violative of article 14.
We are unable to accept this contention.
The establishment of new factories and the expansion of the existing factories need encouragement and incentives.
The exemption in favour of new and expanding factories is based on legitimate legislative policy.
The question whether the exemption should be granted to any factory, and if so, for what period and the question whether any factory has substantially expanded and if so, the extent of such expansion have to be decided with reference to the facts of each individual case.
Obviously, it is not possible for the State legislature to examine the merits of individual cases and the function was properly delegated to the State Government.
The legislature was not obliged to prescribe a more rigid standard for the guidance of the Government.
We hold that section 21 does not violate article 14.
The petitioner in Writ Petition No. 101 of 1967 raised the contention that it was a new factory and that the Government of Andhra Pradesh should have exempted it from payment of tax under section 21(3)(a).
The contention was controverted by the respondents.
The affidavits do not give sufficient materials on the point, nor is there any prayer in the petition for the issue of a mandamus directing the State Government to grant the exemption.
In the circumstances, we do not think it fit to express any opinion on the matter.
It will be open to the petitioner in Writ Petition No. 101 of 1967 to raise this contention in other proceedings.
In the result, the petitions are dismissed with costs, one hearing fee.
G.C. Petitions dismissed. | Under the Andhra Pradesh (Regulation of Supply and Purchase) Act 1961 the occupier of a sugar factory had to buy sugarcane from canegrowers in conformity with the directions of the Cane Commissioner.
Under section 21 of the Act the State Government had power by notification to tax purchases of sugarcane for use, consumption or sale in a sugar factory.
The tax was leviable subject to a maximum rate per metric tonne.
The maximum rate for khandsari units was less than that for factories; sugarcane purchased for production of jaggery was not taxed at all.
The petitioners were sugar factories in Andhra Pradesh.
They filed writ petitions under article 32 of the Constitution challenging the validity of section 21 mainly on the ground that as the petitioners or their agents were compelled by law to buy cane from the canegrowers, their purchases were not made under agreements and were not taxable under Entry 54 List II having regard to Gannon Dunkerley 's case.
It was further urged that the tax leviable under section 21 was not truly a purchase tax as it was levied with reference to weight of the goods, that it was levied with reference to use and was therefore a use tax, and that it was the entry of the goods into the factory that was sought to be taxed Articles 14 and 301 of the Constitution were also said to be contravened.
Held: (1) There has been a gradual erosion of the laissez faire concept which prevailed in the nineteenth century.
It is now realised that in the public interest persons exercising certain callings or having monopoly or near monopoly Powers should sometimes be charged with the duty to serve the public, and if necessary, to enter into contract& The canegrowers scattered in the villages had no real bargaining power.
In the unequal contest between the canegrowers and the factory owners, the law stepped in and compelled the factory to enter into contracts of purchase of cane offered by the canegrowers on prescribed terms and conditions.
[713 C.F.].
Under Act 45 of 1961 and the Rules framed under it, the canegrower in the factory zone is free to make or not to make an offer of sale of cane to the occupier of the factory.
But if he makes an offer, the occupier of the factory is bound to accept it.
The resulting agreement is recorded in writing and is signed by the parties.
The consent of the occupier of the factory is free as defined in section 14 of the Indian Contract Act.
The compulsion of law is not coercion as 706 defined in section 15 of the Act.
The, agreements are enforceable by law and are contracts of sale as defined in section 4 of the Indian Sale of Goods Act.
The purchases of sugarcane under the agreement can be therefore taxed by the State Legislature under Entry 54 List II.
Section 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961 is accordingly not ultra vires.
[712 F H].
State of Madras vs Gannon Dunkerley & Co. ; and New India Sugar Mills Ltd., vs Commissioner of Sales Tax, Bihar, [1963] Supp. 2 S.C.R. 459, distinguished and explained.
Lane vs Cotton, ; E.R. 17, Kirkness vs John Hudson & Co. Ltd. and Ridge Nominees vs I.R.C. , referred to.
The Indian Steel & Wire Products Ltd., vs The State of Madras, ; , relied on.
(ii) Purchase tax need not always be levied with reference to price of goods or with reference to turnover.
It may be levied on the occupier of a factory by reference to the weight of the goods purchased by him.
[717 C E].
It cannot he accepted that a purchase tax must be always levied on goods generally and never with reference to their use, consumption or sale.
Under List II Entry 54 the State Legislature is not bound to levy a tax on all purchases of cane.
It may levy a tax on purchases of cane required for use, consumption or sale in a factory.
The tax so levied is not a use tax.
[717 F 718 B].
McLeod vs Dilworth & Co. ; and C. G. Naidu & Co. vs State of Madras, A.I.R. 1953 Mad.
116, referred to.
The tax under section 21 is not a levy on the (entry of goods into the factory.
Cane cultivated by the factory and entering it cannot be taxed under the section.
[718 G].
Diamond Sugar Mills Ltd., and Anr.
vs State of Uttar Pradesh and Anr.
, ; , referred to.
(iii) Section 21 does not impede free trade, commerce and intercourse and therefore does not offend article 301 of the Constitution.
The tax levied under section 21 does not discriminate against any imported cane.
[719 E 720 A].
A. T. Mehtab Majid and Co. vs State of Madras, [1963] Supp.
2 S.C.R. 435, Atiabari Tea Co ' Ltd., vs State of Assam (Rajasthan) Ltd., vs State of Rajasthan, [1963] 1 S.C.R. 491, referred to.
(iv) The differential treatment of factories producing sugar by means of vacuum pans, khandsari units producing sugar by the open pan process and canegrowers using cane for the manufacture of jaggery is reasonable and has a rational relation to the object of the Act.
There is thus no violation of article 14 of the Constitution.
[720 G H].
Nor does discrimination result from the exemption under section 21(3) of factories which are new or which in the opinion of the Government have substantially expanded.
The exemption is based on legitimate legislative policy.
The question whether the exemption should be granted to a factory and if so for what period and the question whether a factory has substantially expanded and if so the extent of such expansion have to be decided with reference to the facts of each individual case.
It is not possible for the State 707 Legislature to examine the merits of individual cases and the function was properly delegated to the State Government.
The legislature was not obliged to prescribe a more rigid standard for the guidance of Government.
[721 A C]. |
Appeal No. 136 of 1965.
Appeal from the judgment and decree dated March 4, 1960 of the Calcutta High Court in Appeal from Appellate Decree No. 1021 of 1957.
S.V. Gupte, and D.N. Mukherjee, for the appellants.
B.K. Bhattacharya, M.K. Ghose and P.K. Ghose, for respondent No. 1.
P.C. Chatterjee, G.S. Chatterlee and P.K. Bose, for respondent No. 2.
The Judgment of the Court was delivered by Shelat, J.
One Arunshashi Dasi, Charu Chandra Sur and Jotish Chandra Sur were the owners of the suit land admeasuring 1.15 acres situate in Rishra Municipality, West Bengal.
On ' November 15, 1920 they leased the land to Srikrishna Goshala.
On September 10, 1924, the said Goshala sold its leasehold interest in the said land to the 1st respondent Society.
On September 5, 1935 the Society sold the said leasehold interest to one Sovaram Sarma.
In 1941, the said Jostish Sur filed a Rent Suit against Sovaram and obtained an ex parte decree against him.
On September 9, 1941 the said Jotish in execution of the said decree and at an auction sale held thereunder purchased Sovaram 's interest and took possession of the land.
Thereafter, Sovaram 's widow and son flied a suit against the said Jotish alleging that as Sovaram had died during the pendency of the said suit the decree passed against him was a nullity and so also the auction sale.
On June 27, 1945 the said suit was decreed against the said Jotish and appeals by him against the said decree both in the District Court and the High Court were dismissed.
While the said suit was pending, Swaika, the first appellant herein, purchased from the said Jotish his interest in the said land for Rs. 6 '000/ and also agreed to carry on the said litigation against Sovaram 's widow and son.
Swaika thereafter tried to obtain possession of the land but was foiled in doing so by an injunction obtained by Sovaram 's widow ' and son, the plaintiffs in the said suit.
Swaika then got the Education Department to move for the acquisition of the said land for a Girls ' High School of which, it appears, he was the prime spirit.
On July 1, 1946 the State Government 'issued the notification under see.
4 of the Land Acquisition Act in respect of the suit land.
An 'inquiry under section 5A was held and thereafter on April 18, 1951 the Government issued the notification under sec.
6 and passed the necessary order under sec.
On December 22, 1951 the 1st respondent Society purchased the leasehold interest in the said land from Sovaram 's widow and 119 son after their suit was finally disposed of but after the said notification under sec.
6 was issued.
The 1st respondent Society then filed the present suit against the State of West Bengal, the said Swaika and other members of the managing committee of the said school for a declaration that the said notifications and the proceedings taken thereunder were mala fide and null and void and for an injunction against the Government taking possession of the said land.
The Trial Court framed five issues but so far as this appeal is concerned the relevant issue is Issue No. 3, viz. "Is the plaintiff entitled to a decree for a declaration that the declaration under section 6 and order under section 7 and, proceedings under the L.A. Act in Preliminary Land Acquisition Case No. 2 of 1945 46 of Howrah Collectorate were mala fide and in fraud of the Government 's powers under the said Act and null and void and not binding on the plaintiffs ?" On this is issue, the Trial Court found that the 1st respondent Society failed to establish the allegations as to mala fides and abuse of power under the said Act and consequently dismissed the suit.
In the appeal by the 1st respondent Society before the, Additional District Judge the only points urged for determination were (1) whether the said acquisition proceedings were mala fide and in fraud of the Act and therefore null and void and (2 ) whether the Society was entitled to.
an injunction against the Government taking possession of the said land.
It appears from the pleadings as also.
the issues framed by the Trial Court that the question as to whether the State Government was satisfied or not as to the purpose and the need for acquiring the said land was not specifically raised.
Therefore, an attempt was made to.
raise the contention at the time of the heating of the appeal that the declaration under sec.
6 did not prove such satisfaction.
The District Judge, however, dismissed the application for amendment of the plaint by the 1st respondent Society.
The contention was sought to be raised because the notification used the words "as it appears to the Governor that the land is required to be taken for a public purpose" instead of the words, viz., "the Governor is satisfied that the land is needed for a public purpose.
" The argument was that the said words used in the notification did not ex facie indicate the satisfaction of the government which is a condition precedent to such a declaration and that therefore sec.
6 notification was no.t in proper form and the acquisition proceedings taken thereafter were bad in law.
It appears that though the amendment was disallowed, the said cOntention was allowed to be urged, for, the District Judge has answered it in the following terms : 120 declaration under sec.
6 the point that requires for consideration is whether the executive authority did actually form an opinion about the requirement of the land for public purpose.
So far as the present declaration (exhibit 10A) is concerned it will go to show that the land was required for public purpose and it is conclusive in view of the provisions of section 6 of the Land Acquisition Act" On this reasoning he dismissed the appeal.
The District Judge also agreed with the findings of the Trial Court that the 1st respondent Society failed to prove mala fides on the part of the Government or the misuse of its power under the Act.
The 1st respondent Society filed a Second Appeal which was heard by a Division Bench of the High Court.
Before the High Court, Counsel for the respondent Society raised two contentions: as to mala fides and abuse of power and (ii) that the notifications under secs.
4 and 6 were not in accordance with law and were therefore invalid.
The High Court took up the second contention first and held as regards sec.
4 notification that it was valid and could not be assailed.
As regards sec.
6 notification however the High Court was impressed with the contention that after the amendment of sec.
6 by Act 38 of 1923, which substituted the words "when the ' Local Government is satisfied ' for the words "whenever it appears to the Local Government", satisfaction that the land is needed for a public purpose or for a Company is a condition precedent for the declaration under sec.
6 and that therefore the Government should make a declaration "to that effect", i.e., of its satisfaction in the notification itself.
The High Court accepted this contention and held that such satisfaction must appear in the declaration.
The High Court also held that as the notification used the words "whereas it appears to the Governor that the land is required" instead of the words, viz, "whereas the Governor is satisfied that the land is required" the declaration did not show such ,satisfaction and therefore it was not in proper form and could not be said "to afford sufficient statutory or legal basis for proceeding in acquisition.
" As regards the contention as to mala fides and fraud on the statute the High Court held that there was no evidence on the record from which it could be inferred that there was collusion between the said Swaika and the Education Department or the officers of the Land Acquisition Department and that therefore it could not be held that the proceedings were in fraud of the statute or mala fide.
The High Court also observed that "prima facie, there is no reason to differ from the findings made by the courts below.
" 121 The question as to mala fides of the Government or the Government having misused 'its powers or having acted in fraud of the statute was entirely a question of fact.
There being a concurrent finding on that question by the Trial Court and the District Court against the 1st respondent Society, the High Court could not have reopened their concurrent finding except on the ground that it was perverse or unreasonable or without evidence.
Such an argument not having been urged, the High Court could not go into that question.
But it was urged that the High Court has merely expressed a prima facie view and has not conclusively accepted the finding of the Trial Court and the District Court.
That argument has no merit.
What the High Court really meant by the expression "prima facie" was that the finding being concurrent was binding on it and that no contention as to that finding being perverse etc., having been urged before it there was not even a prima facie case to justify the reopening of that finding.
Therefore, the allegation as to mala fides or abuse of power by the Government was conclusively negatived and Counsel for the 1st respondent Society was therefore not entitled to canvass that question before us in this appeal.
The only question therefore that we are called upon to decide is whether the High Court was correct in holding that (i) the Government 's satisfaction must be stated in the notification itself and (ii) that because the notification has used the words "it appears to the Governor" etc., and not the words that the Governor was satisfied, sec.
6 notification was not valid.
To appreciate the construction placed by the High Court it is necessary to consider the effect of the change of words made by sec.
4 of Act 38 of 1923 in sec.
As sub section 1 stood prior to 1923 the words were "subject to the provisions of Part VII of the Act, when it appears to the Local Government that any particular :land is needed for a public purpose or for a Company, a declaration shall be made" etc.
The amendment of 1923 dropped these words and substituted the words "when the Local Government is satisfied after considering the report, if any, made under section 5A of sub section 2" etc.
It seems that the amendment was considered necessary because the same Amendment Act inserted section 5A for the first time in the Act which gave a right to persons interested in the land to be acquired to file objections and of being heard thereon by the Collector.
The new section enjoined upon the Collector to consider such objections and make a report to the Government, whose decision on such objections was made final.
One reason why the word "satisfaction" was substituted for the word "appears" ' seems to be that since it was the Government who after considering the objections and the report of the Collector thereon was to arrive at its decision and then make 'the declaration required LI sup.
CI/68 9 122 by sub section 2, the appropriate words would be "when the Local Government is satisfied" rather than the words "when it appears to the Local Government".
The other reason which presumably led to the change 'in the language was to bring the words in sub see.
1 of see.
6 in line with the words used in see.
40 where the Government before granting its consent to the acquisition for a Company has to "be satisfied" on an inquiry held as provided thereinafter.
Since the Amendment Act 38 of 1923 provided an inquiry into the objections of persons interested in the land under section 5A, section 40 also was amended by adding therein the words "either on the report of the Collector under section 5A or".
41 which requires the acquiring Company to enter into an agreement with the Government also required satisfaction of the Government after considering the report on the inquiry held under sec.
The Amendment Act 38 of 1923 now added in section 41 the report of the Collector under section 5A, if any.
These amendments show that even prior to the 1923 Amendment Act, whenever the Government was required by the Act to consider a report, the legislature had used the word satisfaction on the part of the Government.
Since the Amendment Act 1923 introduced section 5A requiring the Collector to hold an inquiry and to make a report and required the Government to consider that report and the objections dealt with in it, the legislature presumably thought it appropriate to use the same expression which it had used in sees.
40 and 41 where also an inquiry was provided for and the Government had to consider the report of the officer making such inquiry before giving its consent.
But Counsel for the 1st respondent Society argued that since the legislature has used different language from the one it had used earlier, it must mean that it did so deliberately and because it considered the new words as more appropriate.
On the other hand, Counsel for the appellant argued that the meaning of both the expressions is synonymous.
It is not necessary for us in this appeal to construe the two expressions as on a construction of the section we have come to the conclusion that it is not necessary that satisfaction of the Government must ex facie appear in declaration made under the section.
Sub section 1 provides that when the Government is satisfied that a particular land is needed for a public purpose or for a Company, a declaration shall be made "to that effect".
Satisfaction of the Government after consideration of the report, if any, made under sec.
5A is undoubtedly a condition precedent to a valid declaration, for, there can be no valid acquisition under the Act unless the Government is satisfied that the land to be acquired is needed for a public purpose or for a Company.
But there is nothing in sub sec. 1 which requires that such satisfaction need be stated in the declaration.
The only declaration 123 as required by sub sec.
1 is that the land to be acquired is needed for a public purpose or for a Company.
Sub section 2 makes this clear, for it clearly provides that the declaration "shall state" where such land is situate, "the purpose for which it is needed", its approximate area and the place.
where its plan, if made, can be inspected.
It is such a declaration made under sub sec.
1 and published under sub see.
2 which becomes conclusive evidence that the particular land is needed for a public purpose or for a Company as the case may be.
The contention therefore that it is imperative that the satisfaction must be expressed in the declaration or that otherwise the notification would not be in accord with sec.
6 is not correct.
The construction which we have put on sec.
6 is supported by the decision in Ezra vs The Secretary of St 'ate (1) where it was held that a notification under sec.
6 need not be in any particular form.
The case went up to the Privy Council but it appears from the report of that case that these observations were not challenged or disputed before the Privy Council.(2) We are also told by Counsel that no statutory forms are prescribed by the West Bengal Government for such a declaration either under the Act or the rules made thereunder though there are model forms framed presumably for the guidance.
only of the officers of the Acquisition Department.
There being thus no statutory forms and see.
6 not requiring the declaration to be made in any particular form, the mere fact that.
the notification does not ex facie show the Government 's satisfaction, assuming that the words "it appears" used in the notification do not mean satisfaction, would.
not render the notification invalid or not in conformity with sec.
Apart from the clear language of sec.
6 it would seem that it is immaterial whether such satisfaction is stated or not in the notification.
For, even if it is so.
stated.
a person interested in the land can always challenge as a matter of fact that the Government was not actually satisfied.
In such a case the Government would have to satisfy the Court by leading evidence that it was satisfied as required by sec.
In the present case No. such evidence was led because the fact that the Government was satisfied was never challenged in the pleadings and no issue on that question was sought to be raised.
Even when the 1 st respondent Society sought to amend its plaint it did so only to say that the notification did not state such satisfaction and therefore did not establish such satisfaction.
The High Court no doubt thought that this question was covered by Issue No. 3 framed by the Trial Court.
But the contention said to be covered by that issue was not that there was no satisfaction on the part of the Government that the land was needed for a public purpose, viz., for he said Girls ' School, but that (1) I. , 81.
(2) 32 I. A. 93.
124 the notification in the absence of words to that effect did not prove that satisfaction.
That being the position and no issue having been raised on the factum of satisfaction, the State Government was never called upon to lead evidence to prove its satisfaction.
The fact that sec.
5A inquiry was held and objections were filed and heard, the fact that the Additional Collector had recommended the acquisition and had sent his report to that effect and the Government thereafter issued sec.
6 notification would, in the absence of any evidence to the contrary, show that the condition precedent as to satisfaction was fulfilled.
We are therefore of the view that the High Court was in error when it held that sec.
6 notification was not in accord with that section and that proceedings taken thereafter were vitiated.
We may mention that Counsel for the 1st respondent Society cited certain authorities and also attempted to canvass the issue as to mala fides on the part of the Government.
As to the authorities cited by him we think that they were neither relevant nor of any assistance to him.
As regards the question of mala fides, we do not think there is any justification for reopening the concurrent finding of the Trial Court and the AdditiOnal District Judge.
In the result, the appeal is allowed, the High Court 's judgment and decree are set aside and the judgment and decree passed by the Trial Court and confirmed by the Addl.
District Judge dismissing the suit of the 1st respondent Society are restored.
The 1st respondent Society will pay to the appellant the costs in this Court as also in the High Court.
V.P.S. Appeal allowed. | Under section 6 of the Land Acquisition Act, 1894, the State Government issued a declaration with respect to the land of the 1st respondent after considering the report under section 5A of the Act.
The declaration used the words 'as it appears to the Governor that the land is required to be taken for a.public purpose ' instead of the words 'the Governor is satisfied that the land is needed for a public purpose '.
A suit filed by the 1st respondent against the State Government and others challenging the declaration was decreed in second appeal by the High Court.
on the ground that: (1) the satisfaction of the Government as to the purpose of and the need for acquiring the suit land must appear in the declaration itself; and (2) as the declaration used the words 'it appears to the Governor etc., ' instead of the words 'the Governor is satisfied etc. ' it did not show such satisfaction and therefore was.
not in proper form and could not form the legal basis for the acquisition.
In appeal to this Court, HELD: There being no statutory form and section 6 not requiring the declaration to be made in any particular form.
the mere fact that the declaration does not ex facie show the Government 's satisfaction.
assuming that the words 'it appears ' used in the declaration do not mean satisfaction.
would not make the declaration invalid or not in conformity with section 6.
[123 E] Satisfaction of the Government after consideration of the report, any.
made under section 5A is undoubtedly a condition precedent to a valid declaration.
But there is nothing in section 6(1) which requires that the satisfaction should be stated in the declaration, the only declaration required by the sub section being, that the land to be acquired is needed for a public purpose or for a company.
[122G H] Observations in Ezra ' vs Secretary of State, I.L.R. 30 Cal.
36, at p. 81.
approved Further, it is immaterial whether or not such satisfaction is stated in the declaration.
even if it was so stated a person interested in the land can always challenge.
as a matter of fact, that the Government was not actually satisfied, and in such a case, the Government would ' have to satisfy the court by leading evidence that it was so satisfied.
In the present case, the fact that the Government was satisfied was never challenged, the only contention raised being.
that as the declaration dissatisfied was never not state such satisfaction it did not establish such satisfaction.
Therefore, it was not necessary for the Government to lead any evidence prove its satisfaction.
[123F H].
[Whether the words 'it appears to the Governor that the land is required to be taken for a public purpose ' and the words 'the Governor is satisfied that the land is needed for a public purpose ' are synonymous,.
not decided.
[122F G] 118. |
s Nos. 49, 60, 61 and 80 of 1967.
Writ Petitions under article 32 of the Constitution of India for the enforcement of fundamental rights.
K. Narayanaswamy and Lily Thomas, for the petitioner (in W.P. No. 49 of 1967).
Sadhu Singh, for the petitioner (in W.P. No. 60 of 1967).
S.K. Dholakia and Sadhu Singh, for the petitioner (in W.P. No. 61 of 1967).
S.T. Desai and Sadhu Singh, for the petitioner (in W.P. No. 80 of 1967).
C.K. Daphtary, Attorney General, B.L. lyengar, R.H. Dhebar for R.N. Sachthey, for the respondents (in W.P. No 49 of 1967).
R.H. Dhebar for R.N. Sachthey, for the respondents (in W.Ps.
Nos. 60, 61 and 80 of 1967).
The Judgment of the Court was delivered by Bachawat, J.
In all these writ petitions, the petitioners challenge the vires of the Taxation Laws (Extension to Union Territories) Regulation No. 3 of 1963.
The contention is that the President had no power to promulgate the Regulation under article 240 of the Constitution.
On August 16, 1962, Pondicherry became a Union Territory.
On December 5, 1962, Parliament enacted the Pondicherry Administration Act, 1962 (Act No. 49 of 1962).
Section 4 (1 ) of this Act provided that all laws in force immediately before August 19, 1962 would continue to be in force in 105 Pondicherry until amended or repealed by a competent legislature or other competent authority.
Section 4(2) empowered the Central Government to make necessary adaptations and modifications for the purpose of facilitating the application of any such law in relation to the administration of Pondicherry and bringing the provisions of any such law into accord with the provisions of the Constitution.
Section 7 provided that all taxes, duties, cesses and fees which immediately before August 19, 1962 were being lawfully levied would continue to be levied in Pondicherry and to be applied for the same purposes, until other provision was made by a competent legislature or other competent authority.
After the passing of this Act, the petitioners continued to be sub.jeer to the existing French laws relating to income tax.
On March 30, 1963, the President in the exercise of the powers conferred on him by article 240 of the Constitution promulgated the impugned Regulation No. 3 of 1963.
The Regulation extended certain Indian Acts relating to taxation to the Union territories mentioned therein.
Section 3 (2) of the Regulation extended the Income tax Act, 1961, subject to the modifications mentioned in Part II of the Schedule, to Pondicherry as from April 1, 1963.
Section 4(1) provided that any law in force in Pondicherry corresponding to the Income tax Act, 1961 would stand repealed on April 1, 1963.
The petitioners carry on business at Pondicherry and are being assessed to income tax under the Income tax Act.
They have filed the present writ petitions asking for a declaration that the Income tax Act, 1961 was not legally extended to Pondicherry and a direction prohibiting the respondents from implementing that Act in relation to Pondicherry.
In the Constitution of India as originally enacted, India was declared to be a Union of States, [article 1 (1)].
The States and their territories were specified in Parts A, B and C of the First schedule [article 1(2)].
The territory of India consisted of the territories of the States, the territories specified in Part D of the First Schedule (Andaman and Nicobar Islands) and such other territories as may be acquired, [article 1 (3)].
As original enacted.
part VI of the Constitution dealt with Part A States, Part VII dealt with Part B States, Part VIII dealt with Part C States and Part IX dealt with the territories specified in Part D of the First Schedule.
The Constitution (Seventh Amendment) Act passed on October 19, 1956 altered the scheme of division of India in to A B and C States and the territories mentioned in Part D of the first Schedule.
Article 1 and the First Schedule were amended so that the territory of India would comprise the territories of the states, the Union territories specified in the First Schedule and such other territories as may be acquired.
By cl. 30 added to article 66. "Union territory" was defined to mean any Union territory specified in the First Schedule and to include any other territory supp.
C.I./68 8 106 comprised within 'the territory of India but not specified in that Schedule.
Consequential amendments were made in Part VI and other Parts of the Constitution.
Parts VII and IX were repealed.
Part VIII was drastically amended.
The title of Part VIII was altered to that of "Union Territories".
The amended article 239 provided for the administration of Union territories by the President acting through an administrator to be appointed by him.
The amended article 240 was in these terms: "240.
Power of President to make regulations for certain Union territories. ( 1 ) The President may make regulations for the peace, progress and good government of the Union territory of (a) the Andaman and Nicobar Islands; (b) the Laccadive, Minicoy and Amindivi Islands.
(2) Any regulation so made may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and, when promulgated by the President, shall have the same force and effect as an Act of Parliament which applies to that territory.
" The amended article 241 dealt with High Courts for Union territories.
Article 242 relating to Coorg was repealed.
Article 240 (1) and the First Schedule were amended from time to time.
The Constitution (Fourteenth Amendment) Act passed on December 28, 1962 amended the First Schedule and article 240 and added article 239A. Article 239A and the amended article 240 are in these terms: "239A. (1 ) Parliament may by law create for any of the Union territories of Himachal Pradesh, Manipur, Tripura, Goa, Daman and Diu, and Pondicherry (a) a body, whether elected or partly nominated and partly elected, to function as a Legislature for the Union territory, or (b) a Council of Ministers,or both with such constitution, powers and functions, in each case, as may be specified in the law.
(2) Any such law as is referred to in clause (1) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending this Constitution.
107 240.
(1) The President may make regulations for the peace, progress and good government of the Union territory of (a) the Andaman and Nicobar Islands; (b) the Laccudive, Minicoy and Amindivi Islands; (c) Dadra and Nagar Haveli; (d) Gao, Daman and Diu; (e) Pondicherry: Provided that when any body is created under article 239A to function as a Legislature for the Union teriyaki of Goa, Daman and Diu or Pondicherry, the President shall not make any regulation for the peace, progress and good government of that Union territory with effect from the date appointed for the first meeting of the Legislature.
(2) Any regulation so made may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and, when promulgated by the President, shall have the same force and effect as an Act of Parliament which applies to that territory." Regulation No. 3 of 1963 was made by the President in the exercise of the power conferred on him to make regulations for the peace, progress and good government of the Union territories.
The contention that under article 240 the President can make regulations limited to the subject of law and order only cannot be accepted.
The grant of legislative power to make laws, regulations or ordinances for British dependencies has long been expressed in the common form of that of making laws, regulations or ordinances for "peace and good government" of the territory or similar objects such as "peace, order and good government", "peace, welfare and good government" and "peace, progress and good government" of the territory.
Instances of this common form of grant of legislative power to legislatures and authorities in India are section 42 of the Indian Councils Act, 1861, sections 71, 72, 80A of the Government of India Act, 1915, section 72 of the ninth Schedule and section 92(2) of the Government of India Act,1935.
Such a power was held to authorise the utmost discretion of enactment for the attainment of peace, order and good government of the territory and a Court will not enquire whether any particular enactment made in the exercise of this power, in fact, promotes those objects, Riel vs Queen), Chenard and Co. vs Joachim Arissol(2).
The words "peace, order and good government" and (1) , 678 679.
(2) , 132.
108 similar expressions are words of very wide import giving wide discretion to the authority empowered to pass laws for such purposes, Attorney General for Saskatchewan vs Canadian Pacific Ry.
CO.(1) King Emperor vs Benoari Lal Sarma(2).
In Jogendra Narayan Deb vs Debendra Narayan Roy(3) Sir George Rankin said that the words have reference to the scope and not to the merits of the legislation.
Girindra Nath Banerjee vs Birendra Nath Pal(4), he said that "these words are used because they are words of the widest significance and it is not open to a Court of law to consider with regard to any particular piece of legislation whether in fact it is meritorious in the sense that it will conduce to peace or to good government.
It is sufficient that they are words which are intended to give, subject to the restrictions of the Act, a legislating power to the body which it invests with that authority.
" Article 240 of the Constitution confers on the President a general power of making regulations for the peace, progress and good government of the specified Union territories.
In exercise of this power, the President may make a regulation repealing or amending any Act made by Parliament or any existing law which is for the time being applicable to the Union territory.
The regulation when promulgated by the President has the stone force and effect as an Act of Parliament which applies to that territory.
The President can thus make regulations on all subjects on which Parliament can make laws for the territory.
Parliament has plenary power to legislate for the Union territories with regard to any subject.
With regard to Union territories there is no distribution of legislative power.
Article 246(4) enacts that "Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
" In R.K. Sen vs Union(3) it was pointed out that having regard to article 367, the definition of "State" in section 3(58) of the applies for the interpretation of the Constitution unless there is anything repugnant in.
the subject or context.
Under that definition, the expression "State" as respects any period after the commencement of the Constitution (Seventh Amendment) Act, 1956 "shall mean a State specified in the First Schedule to the Constitution and shall include a Union territory. ' But this inclusive definition is repugnant to the subject and con text of article 246.
There, the expression "State" means the State specified in the First Schedule.
There is a distribution of legislative power between Parliament and the legislatures of the States Exclusive power to legislate with respect to the matters enumerated in the State List is assigned to the legislatures of the States esta (1) , 613 614. ' (2) [1914] L.R. 72 I.A. 57, 72.
(3) [1942] L.R. 69 I.A. 76, 90.
(4) Cal.
727, 738, (5) ; , 433. 109 blished by Part V1.
There is no distribution of legislative power with respect to Union territories.
That is why Parliament is given power by article 246(4) to legislate even with respect to matters enumerated in the State List.
If the inclusive definition of "State" in section 3(58) of the were to.
apply to article 246(4), Parliament would have no power to legislate for the Union territories with respect to matters enumerated in the State List and until a legislature empowered to legislate on those matters is created under article 239A for the Union territories, there would be no legislature competent to legislate on those matterS; moreover, for certain territories such as the Andaman and Nicobar Islands no legislature can be created under article 239A, and for such territories there can be no authority competent to legislate with respect to matters,enumerated in the State List.
Such a construction is repugnant to the subject and context of article 246.
It follows that m view of article 246(4), Parliament has plenary powers to make laws for Union territories on all matters.
Parliament can by law extend the Income tax Act, 1961 to a Union territory with such modifications as it thinks fit.
The President in the exercise of his powers under article 240 can make regulations which have the same force and effect as an Act of Parliament which applies to that territory.
The President can therefore by regulation made under article 240 extend the Income tax Act, 1961 to that territory with such modifications as he thinks lit.
The President can thus make regulations under article 240 with respect to a Union territory occupying the same field on which Parliament can also make laws.
We are not impressed by the argument that such overlapping of powers would lead to.
a clash between the President and Parliament.
The Union.
territories.
are centrally administered through the President acting through an administrator.
In the cabinet system of Government the President acts on the advice of the Ministers who are responsible Parliament.
The proviso to article 240(1) lays down the condition for the cesser of power of the President to make regulations under article 240(1).
The power of the President to make regulations for the Union territory of Goa, Daman and Diu or Pondicherry ceases when a legislature for the territory is created with effect from the date appointed for the first meeting of the legislature.
But until such a legislature is created, the President retains his full power to make regulations for those territories.
The proviso does not act as a fetter on the general power of the President to make regulations for the Union territory while no legislature for that territory is brought into.
existence.
The proviso does not enact, as is suggested by the petitioners, that the power of the President is confined 110 to making laws with respect to the matters enumerated in the State List and the Concurrent List.
The argument is that a legislature created under article 239A can be authorised to pass laws with respect to those matters only and having regard to.
the proviso to article 240(1) the President 's power to make regulations under article 240 is similarly circumscribed.
As a matter of fact, the created local legislatures for the Union territories of Himachal Pradesh, Manipur.
Tripura, Goa, Daman and Diu and Pondicherry and section 18 of the Act conferred on those legislatures power to make laws for those territories with respect to the matters enumerated in the State List or the Concurrent List.
Assuming that the local legislature created under article 239A can be authorised to make laws with respect only to the matters enumerated in the State List or the Concurrent List, it does not follow that the power of the President to make regulations under article 240 is so limited.
By the express words of article 240, the President can make regulations for the peace, progress and good government of the specified Union territories.
Any regulation so made may repeal or amend any Act made by Parliament and applicable to that territory.
When promulgated by the President the regulation has the same force and effect as an Act of Parliament applicable to that territory.
This general power of the President to make regulations extends.
to all matters on which Parliament can legislate.
It may be recalled that article 239A and the proviso to article 240(1) were inserted by the Constitution (Fourteenth Amendment) Act.
Under article 240 as it stood after the Constitution (Seventh Amendment) Act and before the enactment of the Constitution (Fourteenth Amendment) Act, it could not be contended that the general power of the President to make regulations under article 240(1) was limited to matters enumerated in the State List and the Concurrent List.
The position was not changed by the insertion of article 239A and the proviso to article 240(1) by the Constitution (Fourteenth Amendment) Act.
Moreover, article 239A does not authorise Parliament to create legislatures for the Union territories of the Andaman and Nicobar Islands, Laccadive, Minicoy and Amindivi Islands and Dadra and Nagar Haveli.
It is clear, therefore, that the power of the President to make regulations with respect to those territories is not limited by the proviso to article 240( 1 ).
We are satisfied.
that the proviso to article 240(1) on its true construction does not fetter the power of the President to make regulations for any of the Union territories specified in article 240(1) including Pondicherry as long as no Legislature is created for the territory.
It was suggested that there is no provision for the distribution of the income tax attributable to Union territories and therefore the President could not extend the Income tax Act, 1961 to the Union territories.
If this argument were sound, even Parliament 111 could not extend the Income tax Act to the Union territories.
Moreover, the argument overlooks article 270 which shows that the income tax attributable to Union territories forms part of the Consolidated Fund of India.
It is not necessary to make any distribution of income tax with respect to Union territories as those territories are centrally administered through the President.
There is no force in the contention that the President cannot make a law with respect to income tax in the absence of an express grant of such a power.
There is distribution of legislative power between the Centre and the States and consequently distinct grants of taxing power are made in the legislative lists.
With respect to Union territories, there is no distribution of legislative power.
For the Union territories, Parliament has plenary powers to make laws and the President has general powers to make regulations.
In the exercise of his powers under article 240, the President could make Regulation No. 3 of 1963 extending the Income tax Act, 1961 and other laws to the Union territories.
The petitions are dismissed with costs, one hearing fee.
Petitions dismissed. | Parliament enacted the Pondicherry Administration Act.
which provided that all laws in force immediately before August 19.
1962, when Pondicherry became a Union territory, were to continue to be in force until amended or repealed by a competent legislature or other competent authority.
The President, in exercise of the powers conferred on him by article 240 of the Constitution to make regulations of "peace, progress and good government" of the Union territories promulgated the Tax Laws (Extension to Union Territories) Regulation.
By this Regulation the laws in force in relation to income tax in Union territory of Pond:cherry were repeated and the Indian Income tax Act, 1961 was made applicable.
The petitioners challenged the rites of the Regulation.
HELD: The Regulation is valid.
The power of the President to make regulations under article 240 is not limited to the subject of law and order.
Authority to make regulations for "peace.
progress and good government" is a common form of grant of legislative power and the expression "peace, progress and good government" is of very wide import giving wide discretion to the authority empowered to pass laws for such purposes.
The President can make regulations with respect to a Union territory occupying the same field on which Parliament can also make laws.
Such a regulation may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and when promulgated has the same force and effect as an Act of Parliament which applies to that territory.
[107E 108D] Riel vs queen.
Chenard and Co. vs Joachim Arissol, , Attorney General for Saskatchewan vs Canadian Pacific Ry.
Co., , King Emperor vs Benoari Lal Sarma, [1914] L.R. 72 I.A. 57.
Jogendra Narayan Deb vs Debendra Narayan Roy, [1942] L.R. 69 I.A. 76 and Girindra Nath Banerjee vs Birendra Nath Pal.
Cal. 727, referred to.
Parliament has, by virtue of article 246(4), power to make laws with respect to any matter including matters enumerated in the State List, for any part of the territory of India not included in a State.
With regard to Union territories there is no distribution of legislative power 104 and Parliament has plenary power to make laws for those territories on any subject.
Though the definition of "State" in section 3(58) of the , taking within it Union territories, applies to the interpretation of the Constitution, this inclusive definition is repugnant to the subject and context of article 246.
There, the expression "State" means the State specified in the FirSt Schedule.
Parliament can by law extend the Income tax Act, 1961, to a Union territory with such modifications as it thinks fit.
The President can, therefore, by regulation do the same.
[108E; 109A D] R.K. Sen vs Union, ; , referred to.
The power of the President to make regulations for any of the Union territories specified in article 240(1) so long as no legislature is created for the territory is not fettered by the.
proviso to article 24 0(2 ) or limited to matters enumerated in the State List and the.
Concurrent list.
[110G] It is not necessary to make any distribution of income tax with respect to Union territories, as those territories are centrally administered through the President.
[111A B] |
Appeal No. 399 of 1957.
Appeal from the judgment and decree dated July 27, 1954 of the High Court of Judicature at Hyderabad in Civil Appeals Nos.
I and 2 of 1954 55.
619 section T. Desai, C. Krishna Reddi, T. Ramachandra Rao and M. section K. Sastri, for the appellants.
Sadashiv Rao, J. B. Dadachanji and section N. Andley, for the respondent.
March 28.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal on a certificate granted by the former High Court of Hyderabad.
A suit was brought by the respondent in 1920 with respect to village Timmapet.
The case of the respondent was that the village had been granted to his ancestor Harinarayan alias Raja Nemiwant Bahadur by the Nizam in 1787.
On the death of Raja Harinarayan, the village was conferred by another sanad on his son Raja Govind Narayan in 1811.
Ever since then the village had continued in the possession of the descendants of Raja Govind Narayan.
In 1817, Raja Govind Narayan granted this village on Tahud (i.e., lease) to Raja Rama Krishna Rao, ancestor of the defendants.
Inam inquiries with respect to this village started in 1901 and then an objection was made on behalf of the appellants that the village had been granted to their ancestors by the Nizam and the respondent was only entitled to the pan mukta of the village and no more.
Pan mukta means a fixed sum which is payable in perpetuity for any land granted by the Ruler or the jagirdar to any person.
The respondent 's case further was that the lease money was being regularly paid, though some time before the suit there was some default.
The respondent had to file a suit to recover the lease money which was decreed and the decretal amount was recovered.
In 1917 disputes arose between the parties and consequently in 1918 the respondent asked the appellants to vacate the village.
They, however, refused to do so.
Thereupon the present suit was filed in 1920 and the respondent 's case was that the lease granted to the appellants was not a permanent lease and could only enure for the lifetime of the grantor and therefore the respondent was entitled to possession of the 620 village, particularly as the appellants had begun to assert a title adverse to the respondent.
The suit was resisted by the appellants, and their main defence was that the village had been granted as bilmakta with a fixed pan makta in their favour by the Nizam and therefore the respondent was only entitled to the fixed pan makta per year and could not claim to dispossess them from the village.
As an alternative, defence of limitation was also pleaded, though the written statement did not make it clear whether the bar of limitation was under article 142 or article 144 of the Limitation Act.
There were other defenses also with which we are however not concerned in the present appeal.
The trial court framed a large number of issues, which were answered in favour of the respondent and the suit was decreed and the plaintiff was held entitled to obtain possession of the village as well as to recover mesne profits at the rate of Rs. 931 12 0 0.
section per year.
On the two main defenses, the trial court held that the village had not been granted by the Nizam to the appellants as claimed by them and the appellants were liable to ejectment as they could not claim the rights of a permanent losses under the lease granted to their ancestor by the respondent 's ances tor.
Further on the question of limitation, the trial court held that the suit was not barred by article 142.
It does not appear that the case of adverse possession was put forward in the trial court.
There were two appeals to the High Court; one of them was by the appellants and the other by the respondent.
The respondent 's appeal was confined only to the rate of mesne profits while the appellants reiterated their two main contentions as to the nature of their right and limitation.
The appeals were heard by a Division Bench of the High Court, the Judges composing Which however differed.
Schri Ran, J., agreed with the trial court as to the nature of the rights of the 'respondent as well as on the question of limitation and was of the opinion that the appeal of the appellants should be dismissed.
It appears that in the High Court a plea 621 of adverse possession was also raised in the matter of limitation; but that plea was also negatived by Schripat Rau, J. Further Schripat Rau, J., was of the View that the appeal of the respondent should be allowed and the amount of mesne profits per year should be _ raised to Rs. 4,381 12 11.
The other learned Judge, Khalilulzaman Siddiqu, J., seems Lo have held in favour of the appellants both on the questions of title and adverse possession and was of the view that the suit should be dismissed in toto.
There was then a reference to a third learned Judge, Ansari, J. He agreed with Schripat Rau, J., on the questions of title and limitation; but as by the time he came to deliver judgment the Hyderabad (Abolition of Jagirs) Regulation, No. LXIX of 1358 F had come into force from 1951 and possession could not be granted to the respondent, Ansari, J., held that the respondent would be entitled to the compensation payable on the abolition of jagirs.
As Ansari, J., had per force to differ from Schripat Rau, J., as to the part of the relief to be granted to the respondent because of the abolition of jagirs, the case was referred to a Full Bench of three Judges in view of section 8 of the Hyderabad High Court Act.
The Full Bench held that as Ansari and Schripat Rau, JJ., were in agreement on the questions of title and limitation these matters did riot fall to be decided before them and would be concluded by the judgment of Ansari, J.
But on the nature of relief on which Ansari, J., per force had to differ from the view of Schripat Rau, J., the Full Bench upheld the view of Ansari, J. Thereafter the appellants applied for a certificate for leave to appeal to this Court, which was granted; and that is how the matter has come up before us.
Learned counsel for the appellants has urged only two points before us.
In the first place, lie submits that on the evidence it has been proved that the Nizam granted a bilmakta sanad to the appellants which included this village also and therefore the appellants were entitled to the possession of the village permanently subject only to the payment of pan 622 makta to the respondent.
In the second place, he submits that even if it be held that the Nizam did not grant a bilmakta sanad including this village, the appellants had perfected their title by adverse possession to the limited right of being permanent lessees under the respondent subject to payment of a fixed amount of rent per year.
The first question therefore that arises is whether the appellants ' case that this village is included in the bilmakta sanad granted to them by the Nizam and therefore by virtue of that sanad they are entitled to hold this village permanently subject only to the payment of a certain sum annually to the respondent, is proved.
It is now no longer in dispute that the village was granted in jagir to the ancestors of the respondent.
It is also not in dispute that in 1817 Raja Govind Narayan granted a kowl in favour of the appellants ' ancestor.
Under the terms of that kowl the village was granted on Tahud (lease) for the fixed sum of Rs. 1027 10 0 per year to the appellants ' ancestor.
No term is mentioned in the kowl as to its duration; but after reciting that the village had been granted on Tahud for a certain fixed amount annually, the kowl goes on to say that the grantee should with entire confidence rehabilitate old and new riots and pay the amount of Tabud annually as per fixed installments, in every crop season.
As one reads the kowl, on its plain terms it cannot be read to confer on the appellants ' ancestor a permanent lease on a fixed sum which was not liable to be varied at all.
But the appellants claim that they had been in uninterrupted possession since 1817 for over 100 years.
on the same rent when the suit was filed and this shows that the village must have been granted to them as a permanent lease.
We cannot accept this contention and the fact that the appellants and their ancestors have continued in possession over 100 years on the same rent would not make the kowl of 1817 a permanent, lease in the face of its plain terms.
The courts below were therefore right in the view that the kowl does not show a grant of a permanent lease on a fixed annual payment to the appellants.
623 The appellants however relied on what happened soon after the kowl was granted to them.
It appears that soon after 1817 the appellants ' ancestor made a vajab ul arz (i.e., application to the Nizam) with various prayers.
One of the prayers was for grant of bilmakta sanad.
This was obviously with respect to certain Government lands, which the ancestors of the appellants held.
In para 6 of the vajab ul arz it is said that "in these days your devotee has regularly paid Government dues and expects that he should receive sanads of bilmakta with the seal of Diwani".
In para 3 it is said that "from out of the Government Talukas whichever is entrusted on Tahud, your petitioner will pay the Tahud amount and will look after and improve the Taluka".
On a fair reading of the vajabul arz there can be little doubt that the ancestor of the appellants was praying that he should be granted a bilmakta sanad of lands held by him from the Government.
To this vajab ul arz was appended a list of villages which apparently the ancestor of the appellants hold.
This list contained 88 villages.
There is no difficulty about 85 of these villages which were apparently field by the ancestor of the appellants from the Government; but about three villages there was a special mention in the list.
These were:(1) Timmapet, Jagir Raja Nemivant, Makta of Zamindar of Sugur.
It may be mentioned that the ancestor of the appellants was the Zamindar of Sugur and that is how he prayed for a sanad of bilmakta; (2) the village Korotkal, attached to Jagir Bahrami, makta Zamindar Sugur; and (3) Palmur, including hamlet Gattalpalli.
These three villages were obviously not of the same kind as the other 85 villages.
Village Timmapet was in the jagir of the ancestor of the respondent and Could not therefore ordinarily be granted to the ancestor of the appellants.
Village Korotkal was an attached jagir which has handed over to one Bakhshi Ismail Khan while village Palmur had been granted to the ancestor of the appellants.
Village himself in lieu of seri.
Strictly speaking these three villages which stood apart should not have been included in the list of villages for which bilmakta 624 sanad was prayed for.
Anyhow the order of the Government on this vajab ul arz was that a sanad with seal of Niabat Diwani be granted.
The actual sanad which was granted by virtue of this order has not been strictly proved, though a copy of it appears in a judgment copy of which has been filed.
We do not therefore propose to refer to this copy.
It appears however that in 1880 a bilmkta sanad was again granted by the Nizam himself to the ancestor of the appellants on the death of the previous holder.
The amount of bilmakta (i.e., fixed annual payment) was fixed at Rs. 1,05,412.
This amount is made up of the revenue of 85 villages out of the 88 villages which were included in the list along with the vajab ul arz.
The remaining three villages which we have mentioned above, were also shown in the schedule to this sanad under the heading "Deduct 3 villages of separate Jagir".
The three villages under this heading are Timmapet, Korotkal and Palmur.
It is the meaning of these words under the heading of which these villages appear which; required interpretation in the present suit.
The contention of the respondent was that the heading showed that the bilmakta sanad granted by the Nizam excluded these villages, for the revenue of these villages amounting to Rs. 2,101 was not included in the bilmakta amount of Rs. 1,05,412.
It is further contended on behalf of the respondent that the, reason why these three villages were mentioned in this manner in the schedule attached to the bilmakta sanad was that the appellants ' ancestor had wrongly included these ' villages in his list filed with the vajab ul arz and ever, since then these villages were included in the schedule to the sanads but were always shown as deducted from the bilmakta.
We are of opinion that this contention of the respondent is correct and the courts below were right in accepting the respondent 's contention in this behalf.
The very fact that the revenue of these villages is not included in the bilmakta amount of Rs. 1,05,412 shows that they could not be part of the bilmakta grant by the Nizam.
We cannot accept the argument on behalf of the appellants that the revenue of these villages was 625 not included because the ancestor of the appellants had to pay the amount of this revenue in the case of Timmapet and Korotkal to the jagirdars and the revenue of Palmur was given to him free in seri.
The very fact that these three villages appear under the heading " 'deduct three villages of separate jagir" along with the fact that their revenue is not included in the bilmakta grant of Rs. 1,05,412 shows that they were not part of the bilmakta sanad.
It is true that they have been mentioned in the schedule, and strictly speaking they should not have been so mentioned there; but the reason for that in our opinion is that the appellants ' ancestor had included them in his list and they seem to have been put down in the schedule to the sanad from that list.
But the way in which they were put in the schedule to the sanad shows that they were not part of the sanad granted by the Nizam.
Our attention was also drawn to the Avarja said to have been prepared in 1836 in which also these three villages are included.
But Avarja is merely a paper in which a note of the sanads issued each day is mentioned.
The fact therefore that these; three villages were mentioned in the Avarja can be easily explained by the fact that they were mentioned in the sanads which were prepared from the list of villages supplied by the appellants ' ancestor along with his vajab ul arz.
The presence of these three villages in the Avarja would not establish that the villages were granted as bilmakta by the Nizam to the appellants ' ancestor, unless the sanads granted by the Nizam establish it.
We have already examined the sanad of 1880 which is on the record and have no difficulty in agreeing with the courts below that the bilmakta sanad excluded these villages and was only confined to the remaining villages for which the appellants ' ancestor paid Rs. 1,05,412 to the Nizam as the fixed annual amount.
It was urged on behalf of the appellants that the Nizam was an absolute Ruler and it Was open to him to take away any land from a jagirdar and grant it to any other person.
That is undoubtedly so; but even where an absolute Ruler takes away some land from 79 626 a jagirdar and gives it to another person, it seems to us clear that he would inform the jagirdar that he had taken away in whole or in part what he had granted to him and would also make it clear by proper words in the sanad granted to the other person that he was giving him the land taken away from the jagirdar.
In any case where the land was granted earlier to the jagirdar, there must be a clear indication in the sanad to another person that what had been granted to the jagirdar had been taken away and was being granted to this other person.
As we read the sanad of 1880 we find no clear indication in it that the village of Timmapet which was granted along with other villages as jagir to the respondent 's ancestor was being taken away at any rate in part and that in future the respondent 's ancestor would only be entitled to a fixed sum from the appellants ' ancestor with respect to this village and no more.
On the other hand, in the recital of the sanad unfortunately there is nothing clear for the words "etc.
" appear therein in more than one place as to the land granted.
We have therefore to turn to the schedule for whatever help we can get from it.
The schedule shows that these three villages were under the heading "deduct three villages of separate jagir".
From that the only inference can be that these three villages were not being included in the bilmakta sanad.
In any case we cannot infer from that the Nizam was intending to take away a part of the rights of the respondent 's ancestor in village Timmapet and confer them on the appellants ' ancestor.
Further there is nothing to show that the respondent 's ancestors were ever informed that the Nizam had taken away part of their rights in village Timmapet.
If anything, as late as 1918 village Timmapet along with others was conferred perpetually in favour of the respondent as zat jagir subject to the payment of 2 per centum of haq malkana.
At that time the appellants ' ancestor had raised some dispute about his right as bilmaktadar of Timmapet but that was left undecided.
On a review therefore of the evidence in this case the conclusion is inescapable that the appellants ' ancestor was never granted bilmakata sanad by the Nizam which 627 included the village of Timmapet.
Their rights in this village therefore depend entirely on the kowl of 1817, which, as we have already pointed out, did not confer a permanent lease.
The case of the appellants therefore based on their title on the sanads granted to them by the Nizam must fail.
We now turn to the question of limitation.
The case put forward before us in that connection is that the appellants have prescribed for the limited right of being permanent lessees of this land by adverse possession and the genesis of this is traced to what happened in 1875.
It appears that there was trouble between the then ancestors of the parties about this village about that time.
The ancestor of the respondent appears to have made an application to the Government and the Revenue Member had issued orders for delivery of possession of this village to him.
Thereupon the ancestor of the appellants made a representation to the Prime Minister against that order in which it was said that the ancestor of the respondent had conferred the said village on the ancestor of the appellants by way of bilmakta (i.e., on a fixed amount) more than eighty years ago and the ancestor of the appellants had been in possession all along and had been regularly paying the amount due; the ancestor of the appellants therefore prayed that the order of delivery of possession of the land to the respondent 's ancestor be set aside.
It is remarkable that in this representation the case put forward was that the village had been granted bilmakta,by the ancestor of the respondent to the appellants ' ancestor and not by the Nizam or the Government to the appellants ' ancestor.
However that may be, the Prime Minister ordered that as the ancestor of the appellants had been in possession for a long time, no order could be passed dispossessing him.
The ancestor of the res pondent then tried to get this order of the Prime Minister changed but failed and in consequence the appellants ' ancestor remained in possession thereof.
It is urged that this shows that the ancestor of the appellants asserted that he was entitled to possession as a permanent lessee against the respondent 's ancestor and this claim was resisted by the respondents 628 ancestor and the resistance failed.
Therefore it must be held that adverse possession of this limited kind was asserted to the knowledge of the respondent 's ancestor and in consequence twelve years after 1875 the adverse title would be perfected and article 144 would bar the present suit for ejectment.
There is no doubt that there can be adverse possession of a limited interest in property as well as of the full title as owner: see Sankaran vs Periasami(1); Thakore Fatehsingji Dipsangji vs Bamanji Ardeshir Dalal (2); and Shrimat Daivasikhamani Ponnambala Desikar vs Periayanan Chetti (9).
The present however is a case where the original kowl was granted by a jagirdar and the question arises whether in the case of a jagir there can be adverse possession of a limited interest in the nature of a permanent lease.
In that connection one has to look to the incidents of a jagir, and the first incident of a jagir is that it must be taken Prima facie as an estate granted, for life: Gulabdas Jugjivandas vs The Collector of Surat.
(4) In the present.
case also the indication is that the jagir that was granted to Raja Harinarayan in 1787, was for life, for we find that on the death of Raja Harinarayan a fresh sanad was granted to his son Raja Govind Narayan in 181 1.
Similar conclusion can be drawn from the fact that as late as 1880 a bilmakta sanad was granted to Raja Rameshwar Rao, an ancestor of the appellants on the death of his father in spite of certain sanads in favour of previous holders of bilmakta.
But the appellants contend that after 1811 no fresh sanads were granted to the descendants of Raja Govind Narayan and therefore it must be held that the jagir became hereditary and was not merely for the lifetime of the grantee after Raja Govind Narayan 's death.
There is no doubt that there are no sanads on the record which might have been granted to the descendants of Raja Govind Narayan; but there is equally no evidence on behalf of the appellants that no such sanads were in fact granted to the descendants of Raja Govind Nara yan, due to change in State Policy.
Reliance has been (1) Mad. 467.
(2) Bom.
(3) (1936) L.R. 63 I.A. Mad.
(4) (1878) L.R. 6 1.A. 54.
629 placed on behalf of the appellants on a publication of the Government of Hyderabad called "Jagir Administration", Vol.
I, at P. 3, where the following passage appears. "Zaot or personal grants were originally tenable for lifetime only.
If, however, the Sanad conferring such grant contains any words indicative of permanency the grant was treated as one in perpetuity.
Formerly on the death of the grantee, the Jagir was attached and re issued in favour of his eldest son by another Sanad.
" It is urged on the basis of this that the system of attachment of jagir and reissue of new sanads in favour of the eldest son fell into disuse in Hyderabad and therefore jagirs became hereditary.
In the first place this passage does not show when the system of attachment of jagir and re issue of another sanad came to an end.
In the second place, even this passage shows that jagirs were tenable only for life unless there was something in the terms of jagir grant to show that it was perpetual.
The jagir grant of Raja Govind Narayan is on the record and there is nothing in it to show that it was granted perpetually, Therefore, it must be held to be a grant for life time only; at any rate it is clear that the system of granting sanads on each succession was certainly in force when Raja Govind Narayan succeeded, for he was granted a fresh sanad.
In his case it must therefore be held that the jagir was granted to him only for life.
Reliance was also placed on Raje Vinaykrao Nemiwant Brahmin vs Raje Shriniwasrao Nemiwant Brahmin (1) where a letter of 1877 from the Government of India, Foreign Department,, is quoted as saying that "The Governor General in Council also accepts the view that these inams are held in accordance with the custom of the Hyderabad State, which permits the continuance of such jagheers to posterity, notwithstanding the absence of specific provision on the point, but at the same time reserves to the State the right of resuming such grants at pleasure.
" (1) I.L.R. 630 But even this letter shows that the State has got the right to resume the grant at pleasure and if that is so it cannot be said that the jagirs granted in Hyderabad were permanent and hereditary, though it may be that a son was allowed to succeed to " 'the father in the normal course.
The State however had always the right to resume the grant at pleasure.
The nature of jagirs in Hyderabad came to be considered by a bench of five judges of the former High Court of Hyderabad in Ahmad un Nissa Begum vs State ( ').
Ansari, J., after referring to two cases of the Privy Council of the former State of Hyderabad as it was before 1947 and certain firmans of the Ruler observed as follows as to the nature of jagirs in Hyderabad: "The cumulative effect of the authorities referred to above is that the jagir tenures in this State consisted of usufructuary rights in lands which were terminable on the death of each grantee, were inalienable during his life, the heirs of the deceased holder got the estate as fresh grantees and the right to confer the estate was vested in the Ruler and exercisable in his absolute discretion.
Nevertheless, the Jagirdars had during their lives valuable rights of managing their estates, enjoying the usufructs and other important privileges which conferred considerable monetary benefits on them." This view of Ansari, J., as to the nature of jagirdari tenure was accepted by the other learned Judges composing the Bench.
Therefore the mere fact that sanads granted to the successors of Raja Govind Narayan have not been produced in this case or even the fact that no such sanads were granted lo them would make no difference to the nature of the jagirdari tenure in Hyderabad.
It is only in 1918 for the first time that we know that this village along with other villages was conferred in perpetuity on the respon dent.
There is nothing to show that before that the respondent 's ancestors had permanent hereditary rights in the jagir.
The initial presumption therefore that jagirs are only for the lifetime of the grantee must prevail in the present case till we come to the sanad of 1918.
Therefore upto that time it must be (1) A.I.R. 1952 Hyd. 163, 167.
631 held that the jagirs were held by various ancestors of the respondent only for their lives.
In such a case where a grant is continued in a family from generation to generation and each grantee holds it for his life the limitation against any one grantee starts to run from the date his title arose.
This was recognized by the Privy Council in Jagdish Narayan vs Nawab Saeed Ahmed Khan (1), where it was observed that where each grantee holds an estate for his lifetime the limitation would start to run against an heir from the date when his title accrued on the death of the previous heir.
From the very fact that the grant of a jagir is only for the life time of the grantee and that his son when he gets the jagir gets a fresh grant, it follows that it was not open to a jagirdar to make an alienation which would enure beyond his lifetime and thus a jagirdar could not grant a permanent lease, unless he was specifically entitled to do so, under the sanad or the law of the State.
Similarly in such cases limitation would only run against an heir from the date when his title accrued on the death of the previous heir.
Consequently the appellants cannot take advantage of what happened in 1875 in the time of Raja Ramarao as the starting point of adverse possession against the respondent.
So far as the respondent is concerned, he apparently succeeded to the jagir in 1910 and in his case limitation would start from 1910.
The present suit was brought in 1920 and therefore so far as the respondent is concerned, there is no question of perfecting even the limited title by adverse possession as against him. ' Learned counsel for the appellant drew our attention in this connection to the case of Daivasikhamani (2), where the Privy Council held that the suits were barred under article 144 of the Limitation Act.
That was however a case where a permanent kowl of temple lands was granted by a manager.
It was held in view of certain facts proved in that case that the lessee had acquired permanent rights by adverse pos session, even though the manager of a temple has no authority, except in certain circumstances, to grant a permanent lease.
That case is in our opinion clearly (1) A.I.R. 1946 P.C. 59.
(2) (1935)) 1 [I.L. R 632 distinguishable from the facts of the present case.
It is true that the manager of a temple has generally speaking no authority except in certain circumstances to grant a permanent lease of temple property; there fore a permanent lease granted by the manager of a temple may be voidable but is not void ab initio and so unless it is avoided by the succeeding manager, it may not be rendered inoperative.
Further the temple in that case was the owner of the property and there was no question of any succession from father to son.
In the case of a jagir on the other hand, the holder for the time being is not the owner of the property; his son when he succeeds holds the property as a fresh grantee and not on the basis of hereditary succession.
A jagirdar has no right to make a permanent alienation of any part of the jagir granted to him; if he makes a permanent alienation even by way of permanent lease the same may be good in his lifetime, but it is void and inoperative after his death; the succeeding jagirdar need not avoid it; he can just ignore it as void.
Therefore, while it may be possible in the case of a permanent lease granted by a manager of a temple which is the owner of the property to prescribe for a limited permanent interest by adverse possession it would be impossible to do so in the case of a jagir, for the limitation in such a case would start to run against the heir from the date when his title accrues on the death of the previous heir and no advantage can be taken of any running of time against the previous holder of the jagir.
Besides, in the case of such temple grants, long lapse of time may sometimes give rise to the inference that the alienation was in such circumstances as would justify a permanent lease.
No such inference is however possible in the case of permanent leases granted by jagirdars.
In this view therefore the case of the appellants that they have prescribed for the limited interest of a permanent lessee against the respondent must fail.
The appeal therefore.
fails and is hereby dismissed with costs.
Appeal dismissed. | Although title to a limited interest in property can be acquired by adverse possession, no limited interest in the nature of a permanent lease can be ordinarily acquired in a jagir which must initially be presumed to enure for the life time of the grantee unless the grant itself shows otherwise.
Sankaran vs Periasami, Mad. 467, Thakore Fatehsingji Dipsangji vs Bamanji Ardeshir Dalal, Bom.
5I5, Shrimat Daivasikhamani Ponnambala Desikar vs Periayanan Chetti, (1936) L.R. 63 I.A. 261 and Gulabdas,Jugjivandas vs The Collector of Surat, (1878) L.R. 6 I A 54, referred to.
Although in the former State of Hyderabad a son might in normal course be allowed to succeed to the father 's jagir, it could not be said that jagirs granted by the State were therefore permanent and hereditary in character, for the State generally .had the right to resume the grant.
Raje Vinaykrao Nemiwant Brahmin vs Raje Shriniwasrao Nemiwant Brahmin, I.L.R. and Ahmad un Nissa Begum vs State, A.I.R. 1952 Hyd. 163, referred to.
Where, therefore, a grant was continued in a family from generation to generation, each grantee must be taken to hold it for his life and limitation against each must start from the date of his title.
Since a jagirdar could not grant a lease beyond his lifetime unless specifically empowered by the sanad or the law of the State, the period of adverse possession against one jagirdar could not be tacked to that against another for the purpose of article I44 Of the Indian Limitation Act.
In this respect a jagirdar stood on a different footing from that of the manager of a temple.
Jagdish Narayan vs Nawab Saeed Ahmed Khan, A.I.R. 1946 P.C. 59, referred to.
Shrimat Daivasikhamani Ponnambala Desikay vs Periyannan Chetti, (1936) L.R. 63 I.A. 26i, distinguished. |
ivil Appeals No. 625630 of 1967.
Appeals by special leave from the judgment and order dated ' March 6, 1967 of the Orissa High Court in O.J.C. Nos.
495 and 496 of 1966, and 3, 4, 27 and 28 of 1967 respectively.
C.K. Daphtary, Attorney General, N.S. Bindra, G. Rath and R.N. Sachthey, for the appellant (in all the appeals).
Sarjoo Prasad and S.N. Prasad, for respondents Nos. 8, 23, 8 ' and 5 (in C.As.
Nos. 6.25; 627,629 and 630 of 1967 respectively).
, N.M. Patnaik and Vinoo Bhagar, for respondents Nos.
5 to 7 (in C.As.
625 and 629 of 1967) and respondents Nos. 20 to 22 (in C.A. No. 627 of 1967).
156 The Judgment of the Court was delivered by Hegde, J.
These cases are the outcome of an unfortunate conflict between the High Court and the government of Orissa.
The Orissa Superior Judicial Service (senior branch) is a combined cadre consisting of officers holding purely judicial posts as well as posts which are essentially administrative in character.
It consists of eight district and sessions judges, two additional district and sessions judges, secretary to government in law department, superintendent and legal remembrancer, law department, deputy secretary to government in the law department, member administrative tribunal and the Registrar of the Orissa High Court, in all 15 in number.
All these officers are the members of the Orissa '"Judicial Service" within the meaning of that expression in article 236(b) of the Constitution.
Out of these, the district and sessions judges and additional district and sessions judges were discharging purely judicial functions.
In view of article 229 of the Constitution.
the power to appoint the Registrar of the High Court is exclusively that of the Chief Justice.
Neither the High Court as such nor the Governor has any hand in his appointment.
The power to appoint the secretaries to the government is that of the Governor.
Under the Government of India Act 1935, the power to transfer a district judge from one post to another was that of the Governor though that power was always exercised in consultation with the High Court and by and large on the recommendation of the High Court.
In Orissa, as in most of the other States, that practice continued till the decision of tiffs Court in the State of Assam vs Ranga Mahammad and others(1).
Obviously when the Governor promulgated the Orissa Superior Judicial Service Rules 1963, he proceeded on the basis that the power to transfer the district judges and addl.
district judges, from one post to another whether as a judge or to one of the posts in the secretariat was in his hands.
It appears that for some time past there were differences between the High Court and the government about the posting of some of the judicial officers.
The High Court was anxious that a judicial officer occupying one of the administrative posts enumerated above, should not, in the interest of judicial work, continue in that post for an unduly long time.
The High Court insisted that ordinarily judicial officers should: not hold those posts for more than three years.
The High Court was repeatedly requesting the government to send back judicial officers working in administrative posts as district judges or as addl.
district judges as the case may be, after they had held those posts for three years or more.
But those requests were not respected.
On that account, there appears to have been some friction between the High Court and the gov ernment for some years past.
(1) ; 157 Shri B.K. Patro one of the district and sessions.
judges, was posted as superintendent and legal remembrancer in March 1962 Shri K.K. Bose, addl.
district and sessions judge, was posted as joint secretary in the law department in the same month.
He worked in that capacity till February 1965.
Thereafter, he was, posted as superintendent and legal remembrancer.
Shri P.C. Dey.
a district and sessions judge, was posted as member sales tax tribunal on 31 1 62.
That was a non cadre post.
In February 1965, the High Court took a policy decision to the effect that as a general rule, judicial officers working in special posts whether cadre or non cadre, outside their regular line, should be recalled to the regular line after the completion of three years.
in the interest of the service as well as the officers, so that "Officers may not deteriorate by remaining out of touch from regular judicial work for continuously long periods and the service will not suffer by being deprived of the services of senior and experienced officers in manning the posts in the regular judicial line.
" It is of utmost importance that judicial officers should not be kept away from judicial work for a long time lest they should lose touch.
with judicial work and even more than that should become indifferent to judicial approach.
The above.
policy decision was duly communicated to the government.
The government by its letter of April 2, 1965, intimated that it had no objection to adhere to the principle of three years service in an appointment at a particular station against a special post.
But when it came to the question of implementing that policy, the government was reluctant.
Every time the High Court requested the government to release the three officers mentioned above for 'being posted as district and sessions judges or addl.
district and sessions judges as the case may be, the government turned down those requests on one ground or the other.
We do not think that it was proper for the government to do so.
But at that stage the High Court felt helpless as it was under the impression that under law the Governor was the sole authority to effect the. necessary transfers.
On September 21 1966, this Court rendered its decision in Ranga Mahammad 's(1) case.
Therein this Court held that power to transfer judges presiding over courts vested with the High Court under article 235 of the Constitution.
Soon after that decision was rendered and without any further dialogue with government in the ' light of that decision, the High Court took the precipitate step of transferring the aforementioned officers to other posts and in their place posted officers who were doing judicial work till then.
By its order dated October 10, 1966, the High Court ordered the following transfers: (a) Shri K.B. Panda who was attached to the commission of enquiry in connection with students ' (1) ; 158 agitation, as law secretary to the government of Orissa, (b) Shri B.K. Patro, the then law secretary as district and sessions judge of Ganjam Boudh, (c) Shri T. Misra, district and sessions judge, Ganjam Boudh, as superintendent and legal remembrance and ex officio additional law secretary to the government of Orissa, (d) Shri K.K. Bose, the then superintendent and legal remembrance and additional law secretary as district and sessions judge of Mayurbhanj Keonjhar.
(e) Shri P.K. Mohanti, district and sessions judge, Bolangir Kalahandi, as deputy secretary to the law department, a post which was vacant then, and (f) Shri P.C. Dey, member sales tax tribunal, as district and sessions judge, Bolangir Kalahandi.
These orders were duly notified in the Orissa Gazette.
In pursuance of those orders, Shri K.B. Panda, Shri T. Misra and Shri P. K. Mohanti handed over charge of the posts they were holding and reported themselves at the secretariat for assuming charge of the posts to which they were posted.
But the government refused to accept them.
Further it directed Shri Patro, Shri Bose and Shri Dey to continue in the posts they were holding.
Those officers acted in accordance with the orders of the government.
Consequently, the sessions divisions of Ganjam Boudh, Mayurbhanj Keonjhar and Bolangir Kalahandi were without district and sessions judges for several days.
It is at this stage the petitions which have given rise to those appeals were filed by some of the advocates practising in one or the other of the sessions divisions mentioned above, praying for a writ of mandamus against the government as well as the concerned officers to implement the transfers ordered by the High Court on October 10, 1966 and also a writ of quo warranto against Shri B.K. Patro, Shri K.K. Bose and Shri P.C. Dey requiring them to show cause under what authority they were holding the posts of the law secretary the superintendent and legal remembrancer and member sales tax tribunal, respectively.
In every one of those petitions, rule nisi was issued.
The government as well as the concerned officers in the returns made by them justified the action taken by the government.
On March 6, 1967 a special Bench of the High Court by majority allowed those petitions and made the rule absolute.
The High Court overruled the prayer made on behalf of the government to stay the operation of its decision till necessary orders were obtained from this Court.
It directed the government to imple 159 ment its orders forthwith.
Having No. alternative before it, the government implemented the orders in question on March 6 1967, on the very day the decision of the High Court was rendered.
The government 's prayer for necessary certificates for leave to appeal to this Court was rejected.
Therefore, these appeals were filed after obtaining special leave from this Court.
The order of the High Court consists of two parts, namely, (1) holding that Shri B.K. Patro, Shri K.K. Bose and Shri P.C. Dey had no authority to act as law secretary, superintendent and legal remembrancer and member sales tax tribunal, respectively, on and after October 10, 1966, and (2) commanding the State of Orissa, the Chief Secretary to the government of Orissa, the Home Secretary to the government of Orissa, Shri P.C. Dey, Shri K.K. Bose and Shri Patro to implement the transfers ordered by the High Court on October 10, 1966.
It was not the case of the contesting respondents that Shri P.C. Dey, Shri K.K. Bose and Shri B.K. Patro had not the necessary qualifications to hold the posts they were holding.
It was also not disputed that they had been validly appointed to those posts.
In these circumstances we fail to see how the High Court could have held that they had no authority to hold the posts in question.
Shri Sarjoo Prasad learned counsel for the High Court of Orissa at the very commencement of his arguments conceded that the order of the High Court holding that those officers had no authority to hold the posts in question is unsustainable.
In view of that concession it is unnecessary for us to go into that question further.
As mentioned earlier, member, sales tax tribunal, was an ex cadre post.
Hence in the case of Shri P.C. Dey it must be assumed that his services were placed by the High Court at the disposal of the government for being posted as member sales tax tribunal.
It is not the case of the parties that he was placed at the disposal of the government for any definite period.
AS seen earlier, he was holding the post in question ever since 1962.In those circumstances, the High Court was entitled to recall him and post him as a district and sessions judge.
Hence that part of the High Court 's order is unassailable.
Before going into the validity of the orders of transfer relating to the other officers, it is necessary to ascertain the law bearing on the subject.
As seen earlier, the cadre of the superior judicial service (senior branch) consisted of not only the posts of district and sessions judges and addl.
district and sessions judges but also officers holding other posts.
One of the officers included there is the Registrar of the High Court.
Neither the government nor the High Court could have posted any officer as the Registrar of the High Court as that post can be filled only by 160 the Chief Justice.
To hold otherwise would be to contravene article 229 of the Constitution.
Similarly the posts of the law secretary, deputy law secretary and file superintendent and legal remembrancer cannot be considered as district courts or courts subordinate to district courts within the meaning of those words in article 235 of the Constitution.
Those posts are similar to.
the corresponding posts in other departments in the secretariat.
Prima facie it is for the Governor to fill up those posts.
It was conceded that if those posts had not been included in the cadre of superior judicial service the High Court would not have had any right to fill those posts.
But we were told that in view of the decisions of this Court in State of West Bengal vs Nripendra Nath Bagchi(1) and State of Assam vs Ranga Mahammad(2) the High Court must be held to have that right as those posts are included in the cadre of superior judicial service.
Before considering the correctness of that submission it is necessary to notice that this argument breaks down when we come to the question of filling up the post of the Registrar.
If the argument advanced on behalf of the High Court is correct.
the High Court must also have, the power to fill up the post of the Registrar as that is also Included in the cadre.
Now let us consider the ratio of the decisions in Nripendra Nath Bagchi 's case (1), and Ranga Mahammad 's (2) case.
In Bagchi 's case,(1), this Court laid down that the word "control" found in article 235 includes disciplinary jurisdiction as well.
The only question that fell for decision in that case was whether the government of West Bengal was competent to institute disciplinary proceedings against an addl.
district and sessions judge.
This Court upheld the decision of the High Court of Calcutta holding that it had no such jurisdiction.
That was the single question decided in that case.
It is true that in the course of the judgment.
this Court observed that the High Court is made the sole custodian of the control of the judiciary, but that observation was made only in the context of the question that arose for decision.
In Ranga Mahammad 's case(2), the point that arose for decision was as to who was the authority to transfer a district judge.
the State government or the High Court.
In that case, the State government ordered the transfer of certain district judges without even consulting the High Court.
The rule laid down in that decision is of no assistance in determining the question as to whether the High Court has power to fill up some of the posts in the secretariat.
In the course of that judgment, this Court observed (at page 459 of the report): "The question we have posed resolves itself into a question of a very different but somewhat limited form.
(1) ; (2) ; 161 namely, whether the power to transfer District Judges is included in the 'control ' exercisable by the High Court over District Courts under article 235, or in the power of 'appointment of persons to be and the posting and promotion, of district judges ' which is to be exercised by the Governor under article 233, albeit in consultation with the High Court.
If the sense of the matter be the former, then the High Court and if the latter, the Governor, would possess that 'power.
The right approach is, therefore, to enquire what is meant by 'posting ' and whether the term does not mean the initial posting of a District Judge on appointment or promotion to a vacancy in the cadre, permanent or temporary.
If this be the meaning, as the High Court holds.
then the transfer of District Judges already appointed or promoted and posted in the cadre must necessarily be outside the power of the Governor and fall to be made by the High Court as part of the control vested in it by article 235." After analysing articles 233 and 235 and noticing the development of the law on the subject this Court held that under article 233, the Governor is only concerned with the appointment, promotion and posting to the cadre of district judges but not with the transfer of district judges already appointed or promoted and posted to the cadre which power is vested in the High Court under article 235 as the control given to the High Court over the district courts under that Article includes control over the officers who preside over those courts.
Proceeding further this Court observed: "This is, of course, as it should be, the High Court is in the day to day control of courts and knows the capacity for work of individuals and the requirements of a particular station or Court.
The High Court is better suited to make transfers than a Minister.
For however well meaning a Minister may be he can never possess the same intimate knowledge of the working of the judiciary as a whole and of individual Judges, as the High Court.
He must depend on his department for information.
The Chief Justice and his colleagues know these matters and deal with them personally.
There is less chance of being influenced by secretaries who may withhold some vital information if they are interested themselves.
It is also well known that all stations are not similar in climate and education, medical and 162 other facilities.
Some are good stations and some are not so good.
There is less chance of success for a person seeking advantage for himself if the Chief Justice and his colleagues, with personal information, deal with the matter, than when a Minister deals with it on notes and information supplied by a secretary.
The reason of the rule and the sense of the matter combine to suggest the narrow meaning accepted by us.
The policy displayed by the Constitution has been in this direction as has been explained in earlier cases of this Court.
" Obviously relying on the observation of this Court that after a judicial officer is posted to the cadre, it is for the High Court to effect his transfers, the court below has come to the conclusion that as the posts of the law secretary, deputy law secretary and superintendent and legal remembrancer are included in the cadre, the High Court has the power to fill those posts by transfer of judicial officers.
The cadre this Court was considering in Ranga Mahammad 's(1) case, namely, Assam Superior Judicial Services Cadre consisted of the Registrar of the Assam High Court and three district judges in the first grade and some additional district judges in grade II.
In that cadre, no officer holding any post under the government was included.
Hence the reference by this Court to the cadre is a reference to.a cadre consisting essentially ,of officers under the direct control of the High Court.
It was in that context this Court spoke of the cadre.
The question of law considered in that decision was as regards the scope of the expression "control over district court" in article 235.
The reference to the cadre was merely incidental.
A decision is only an authority for what it actually decides.
What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it.
On this topic this is what Earl of Halsbury L.C. said in Quinn vs Leathem(2): "Now before discussing the case of Allen vs Flood and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to.
be found.
The other is that a case is only an authority for what it actually decides.
I entirely deny that it can (1) ; (2) [1901] A.C. 495.
163 be quoted for a proposition that may seem to follow logically from it.
Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all.
" It is not a profitable task to extract a sentence here and there from a judgment and to build upon it.
Neither Bagchi 's case nor Ranga Mahammad 's case is of any assistance to us in deciding the question whether the High Court has competence to fill some of the posts in the secretariat by transfer judicial officers under Its control.
Just as the executive cannot know the requirements of a particular court, the High Court also cannot know the requirements of any post in the secretariat.
Just as the High Court resents any interference by the executive in the functioning of the judiciary, the executive has a right to ask the High Court not to interfere with its functions.
It is for the executive to say whether a particular officer would meet its requirements or not.
The High Court cannot, as contended by the learned Attorney General, foist any officer on the government.
The cadre with which we are concerned in this case consists of three parts i.e., (1) presiding officers of district courts, (2) the Registrar of the High Court and (3) the judicial officers working in the secretariat.
No doubt all these officers belong to the judicial service of the State and they were before 1962 presiding over district courts or courts subordinate to them and as such were under the control of the High Court.
Hence without the consent of the High Court the government could not have posted them to administrative posts in 1962.
It must be presumed that they were taken over by the government with the consent of the High Court.
While sparing the service of any judicial officer to the government it is open to the High Court to fix the period during which he may hold any executive post.
At the end of that period, the government is bound to allow him to go back to his parent department unless the High Court agrees to spare his services for some more time.
In other words, the period during which a judicial officer should serve in an executive post must be settled by agreement between the High Court and the government.
If there is no such agreement it is open to the government to send him back to his parent department at any time it pleases.
It is equally open to the High Court to recall him whenever 'it thinks fit.
If only there is mutual understanding and appreciation of the difficulties of the one by the other, there will be harmony.
There is no reason why there should be any conflict between the High Court and the government.
Except for very good reasons we think the High Court should always be 164 willing to spare for an agreed period the services of any of the officers under its control for filling up such executive posts as may require the services of judicial officers.
The government, in its turn should appreciate the anxiety of the High Court that judicial officers should not be allowed to acquire vested interest in the secretariat.
Both the High Court and the government should not forget the fact that powers are conferred on them for the good of the public and they should act in such a way as to advance public interest.
If they act with that purpose in view as they should, then there is no room for conflict and no question of one dominating the other arises.
Each of the organs of the State has a special role of its own.
But our Constitution expects all of them to work in harmony in a spirit of service.
As Shri K.K. Bose and Shri B.K. Patro had not been placed at the disposal of the government for any definite period, it was open to the High Court to recall them and post them as presiding officers of district courts.
Hence, the High Court was within its powers in posting Shri B.K. Patro as district and sessions judge of Ganjam Boudh division, Shri K.K. Bose as district and sessions judge of Mayurbhanj Keonjhar division, and Shri P.C. Dey as district and sessions judge of Bolangir kalahandi division though it would have been graceful if it had effected those transfers after reasonable notice to the government.
But it was beyond the powers of the High Court to post Shri K.B. Panda as the law secretary, Shri T. Misra as superintendent and legal remembrancer and Shri P.K. Mohanti as the deputy law secretary.
That part of the High Court 's order is clearly unsustainable.
But as mentioned earlier, the government has already implemented that part of the order as well.
Those officers are now functioning in the posts to which they were transferred.
The learned Attorney General told 'us that the government has no objection to those officers continuing in those posts for the present.
We are sure if any change is required the same will be effected by mutual understanding between the High Court and the government.
In the result these appeals are partly allowed and the order of the High Court holding that Shri B.K. Patro, Shri K.K. Bose and Shri P.C. Dey had no authority to hold the posts they were holding on or after October 10, 1966 is set aside.
Though we hold that the orders of the High Court posting Shri B.K. Panda as law secretary, Shri T. Misra as superintendent and legal remembrancer and Shri P.K. Mohanti as deputy law secretary were excess of its powers, we do not set aside the mandamus issued by it for the reasons mentioned earlier.
In other respects the judgment appealed against is upheld.
The parties will bear their own costs in these appeals.
R.K.P.S. Appeals allowed in part. | The Orissa Superior Judicial Service consisted of 15 posts.
10 of which were District and Sessions Judges or Additional District and Sessions Judges; of the other five, one was Registrar of the High Court and four were officers of the State Government.
P, one of the District and Sessions Judges was posted as Superintendent and Legal Remembrance in March 1962.
B. an Additional Judge.
was posted as Joint Secretary in the Law Department in the same month and sometime thereafter was posted as Superintendent and Legal Remembrance.
D, a District and Sessions judge was posted in January 1962 as member.
Sales Tax Tribunal, which was a non cadre post.
In February 1965 the High Court took a policy decision to the effect that as a general rule, judicial officers working in special posts.
whether cadre or non cadre.
outside their regular line, should be called to the regular line after the completion of three years in the interest of the service as well as the officers, so that the officers did not become out of touch with judicial work.
Although this policy decision was accepted by the State Government.
it was not implemented ' in respect of P, B and D.
The High Court being under the impression at the time that in law the Governor was the sole authority to effect the necessary transfers.
did not take any action itself.
After the decision of this Court in Ranga Mohammad 's case ; holding that the power to transfer Judges presiding over Courts vested with the High Court under article 235 of the Constitution.
the High Court. issued an order on October 10.
transferring P. B and D to judicial posts and posting to the administrative posts in their place, K. T and M who were doing judicial work till then.
In pursuance of those orders K. T and M handed over charge of the posts they were holding and reported to the Secretariat for assuming charge of the administrative posts to which they were assigned.
but the Government refused to accept them.
The State Government directed P. B and D to continue in the posts they were previously holding and those officers acted in accordance with the orders of the Government.
Consequently.
some of the Sessions Divisions in the State were without District and Sessions Judges for several days and some Advocates practising in those Divisions filet/petitions before the High Court for a writ of mandamus against the Government.
as well as the concerned officers to implement the transfers ordered by the High Court.
They also sought a writ of quo warranto against P. B and D questioning the authority under which they were holding the administrative posts held by them until then.
The High Court allowed the petition and directed the Governments to implement its orders forthwith.
The Government implemented these orders on March 6.
1967 and thereafter appealed to this Court, by special leave.
155 HELD: (i) Although the High Court was within its powers.
in posting P. B and D, the three officers holding administrative posts.
as District and Sessions Judges, it was beyond its powers to post in their places three other officers to the administrative posts.
Just as the executive cannot know the requirements of a particular court, the High Court cannot also know the requirements of any post in the Secretariat.
It is for the Executive to say whether a particular officer would meet its requirements or not.
The High Court cannot foist an officer on the Government.
[163C D] While sparing the service of any judicial officer to the government it is open to the High Court to fix the period during which he may hold any executive post.
At the end of that period, the government is bound to allow him to go back to his parent department unless the High Court agrees to spare his services for some more time.
In other words, the period during which a judicial officer should serve in an executive post must be settled by agreement between the High Court and the government.
If there is no such agreement it is open to the Government to send him back to his parent department at any time it pleases.
It is equally open to the High Court to recall him whenever it thinks [163 F H] It was not the case of the contesting respondents that P, B and D did ' not have the necessary qualifications to hold the posts that they were holding or that they had not been validly appointed to those posts.
In these circumstances the High Court could not have held that they had no authority to hold the posts in question.
[159D] State of Assam vs Ranga Mohammad and Ors. ; ; State of West Bengal vs Nripendra Nath Baghi; ; ; explained and distinguished.
(ii) A decision is only an authority for what it actually decides.
What is of the essence in a decision is its ratio and not other observations found therein nor what logically follows from the various observations made in it.
[162E F] Quin vs Leathem, ; ; referred to. |
ion No. 1 of 1967.
Election Petition under Presidential and Vice Presidential Elections Act, 1952.
R.V.S. Mani, for the petitioners.
M.C. Setalvad, J.M. Mukhi and A.S. Nambiar, for respondent No. 1.
E. Udayaratnam, for respondent No. 6.
Janardan Sharma, for respondent NO. 10.
O.P. Varma, for respondent No. 12.
C.C. Patel and M.V. Goswami, for respondent No. 14.
Bhimsena Rao and R.A. Gupta, for respondent No. 17.
C.K. Daphtary, Attorney General, R.H. Dhebar and S.P. Nayar, for Election Petition of India and Returning Officer.
Presidential Election, New Delhi.
C.K. Daphtary, Attorney General, N.S. Bindra and R.H. Dhebar, for Attorney General for India.
The Judgment of the Court was delivered by Wanchoo, C.J.
The presidential election in India was held in May 1967.
In that election, 17 candidates were nominated.
The result of the election was declared on May 9, 1967, and Dr. Zakir Husain was declared elected.
The present petition is against 137 The election of Dr. Zakir Husain as President and has been filed under article 71 of the Constitution read with the Presidential and Vice Presidential Elections Act, No. 31, 1952 (hereinafter referred to as the Act) by 13 members of Parliament.
The attack on he validity of the election of Dr. Zakir Husain has been made on two grounds.
The first ground is that no oath was taken by Dr. zakir Husain before his nomination as required by article 84 read with article 58 of the Constitution.
In consequence he was not eligible for election as President and his election is liable to be set aside.
Curiously enough, however, the petitioners pray for a declaration that Sri Subba Rao, who received the second highest number of votes should be declared elected, though he (like Dr. Zakir Husain) also did not take the oath before his nomination.
The second ground on which the election of Dr. Zakir Husain s challenged is that the result of the election has been materially affected by reason of undue influence, thereat and in this connection reliance is placed on four matters to which reference will be made later.
The petition has been opposed on behalf of Dr. Zakir Husain.
It has been urged in reply that no oath was necessary under article 84 read with article 58 of the Constitution, and as such he was eligible to stand.
It has also been said on behalf of Dr. Zakir Husain that in case his nomination is invalid on that ground, Sri Subba Rao 's nomination is equally invalid as he also did not take the oath.
As to undue influence it is urged that no undue influence was exercised, nor was the result of the election materially affected by any exercise of undue influence.
Of the four matters urged in support of the attack on the ground of undue influence, the truth of one of them was not accepted.
But it is urged in the alternative that even accepting all that has been said by the petitioners in support of their case of undue influence, the allegations made by the petitioners do not in law amount to.
undue influence and therefore there could be no question of the result of the election being materially affected by the exercise of any undue influence.
On the pleading of the parties, the following issues were framed : 1.
Whether the acceptance of the nomination papers of respondents Nos. 1 to 17 by the Returning Officer was illegal and contrary to law for the reason that Respondents Nos. 1 to 17 did not subscribe to the oath required under Article 84(a) of the Constitution read with Article 58(1)(c) thereof; 2.
Whether the result of the election has been materially affected; L10Sup.(CI)/168 10 138 3.
Whether the acts and conduct alleged in para 12 of the petition and set out under heads A, B, C and D thereof amount to undue influence within the meaning of section 18(1)(b) of the Act.
Whether the allegations made under heads A, B, C and D in para 12 of the petition in so far as they are not admitted arc true; 5.
Whether the petition is entitled to any relief, and if so, to what relief.
It will be seen that issues Nos. 1 and 3 raise pure questions of law.
We made it clear to learned counsel that we would try this petition in two parts.
We shall first deal with the two issues of law, and then, if necessary, set the petition down for further hearing on evidence.
We also indicated that if issue No. 1 is decided in favour of the petitioners, the election would have to be set aside and then there would be no question of any further hearing on evidence.
We further indicated that if issue No. 3 is decided in favour of 1he petitioners, the petition would have to be set down for further hearing on evidence on matters of fact which were in dispute.
Lastly, we indicated that if both these issues were decided against the petitioners, the petition would fail and it would not be necessary then to set it down for further hearing on evidence.
We propose now to consider the two issues of law.
Issue No. 1.
In order to decide this issue, we have to see what the Constitution provided, before the Constitution (Sixteenth Amendment) Act, 1963 (hereinafter referred to as the Amendment Act).
This Act was passed on October 5.
Before that amendment article 58 (1) with which we are concerned in the present petition was in these terms : "(1) No person shall be eligible for election as President ', unless he (a) is a citizen of India, (b) has completed the age of thirty five years, and (c) is qualified for election as a member of the House of the People.
" Article 84, which is also relevant read thus "A person shall not be qualified to be chosen to fill a seat in Parliament unless he (a) is a citizen of India; (b) is, in/he case of d seat in the Council of States, not less than thirty years of age and, in the ease 139 of the House of the People, not less than twenty five years of age; (c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.
" The Representation of the People Act, No. 43 of 1951 provided some qualifications for membership of the House of the People, by section 4.
Besides that article 102 of the Constitution provided for certain disqualifications for membership of either House of Parliament and thus indirectly provided for qualifications necessary for being a member of either House of Parliament, and these were (1) that the person should not hold any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holders; (2) the person should not be of unsound mind and should not have been so declared by a competent court; (3) the person should not be an undischarged insolvent; (4) the person should not have voluntarily acquired the citizenship of a foreign State, or be under any acknowledgement of allegiance or adherence to a foreign State; and (5) the person should not be disqualified by or trader any law made by Parliament.
A perusal of these provisions show that there was no requirement of taking an oath at the time of nomination by the presidential candidate in article 58.
Nor was there any requirement of taking any oath at the time of nomination by a candidate for election to the House of the People under article 84.
There were however provisions in the Constitution for taking an oath after election.
The oath of the President and its form was provided in article 60 while the oath for a member of the House of the People after 'election was provided in Schedule III to the Constitution.
which a member of Parliament had to take before taking his scat in the House of the People or the Council of States, as the case may be.
It is not disputed on behalf of the petitioners that this was the undoubted position in law before the Amendment Act.
Then came the Amendment Act, which came into force from October 5, 1963.
By that amendment, no change was made in article 58.
which stood as it was: a change was however made in Cl.
(a) of article 84, which after the Amendment Act read thus: "84.
Qualification for membership of Parliament A person shall not be qualified to be chosen to fill a seat in Parliament unless he (a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Elec 140 tion Commission an oath or affirmation according to the form set out for the purposes in the Third Schedule;" The Third Schedule was also amended and provided the following form of oath to be taken by a member of Parliament who stands for election to Parliament, namely "I, A. B, having been nominated as a candidate to fill a seat in the Council of States do House of the People swear in the name of God that I will bear true solemnly affirm faith and allegiance to the Constitution of India as by law established and that I will uphold the sovereignty and integrity of India.
" At the same time amendment was made in the form of oath to be taken after election, the change being that the words "I will uphold the sovereignty and integrity of India" were added to the already existing oath to be taken by a member of Parliament after his election before he took his seat in the House of the People or the Council of States.
The contention on behalf of the petitioners is that because of this change in cl.
(a) of article 84 by which it became necessary to take.
oath for a person standing for election to either House of Parliament in the form prescribed in the Third SChedule, a person standing for election as President had also to take a similar oath because article 58(1)(c) requires that a person to be eligible for election as President must be qualified for election as a member of the House of the People.
It is urged that no one is qualified, after the amendment of cl.
(a) of article 84, for election as a member of the House of the People unless he makes and subscribes an oath in the form set out for the purpose in the Third Schedule, and therefore this provision applied to a person standing for election as President, for without such oath he would not be qualified to stand for election to the House of the People.
The argument looks attractive prima facie but must in our opinion be rejected.
The qualifications for eligibility to stand for election as President are to be found in article 58(1).
The main reliance on behalf of the petitioners is placed on cl.
(c) of article 58 (1), which lays down that a candidate standing for election as President has to be qualified for election as member of the House of the People.
A comparison however of article 58 with article 84 as it stood before amendment shows that el.
(a) of article corresponded to cl.
(a) of article 58(1), as both provided that the respective candidates should be citizens of India.
It was therefore not necessary to go to cI. (a) of article 84 for the purpose of finding out whether a person was eligible for election as President for 141 the purpose of citizenship for that part of cl.
(a) of article 84 was specifically provided for in cl.
(a) of article 58 (i).
Similarly, cl.
(b) of article 84 corresponded to cl.
(b) of article 58(1), with this difference that it provided a special qualification as to age and therefore one would not have to go to cl.
(b) of article 84 for the purpose of finding out the qualification as to age Cl.
(c) of article 38 (1) clearly corresponded to cl.
(c) of article 84 and reading them together it would follow that a person standing for election as President would require such qualifications as may be prescribed in that behalf by or under any law made by Parliament.
Further as cl.
(c) of article 58(1) lays down that a person standing for presidential election has to be qualified for membership of the House of the People, article 102 (which lays down disqualifications for members of Parliament) would also be attracted except in so far as there is a special provision contained in article 58(2).
Thus cl.
(c) of article 58(1) would bring in such qualifications for members of the House of the People as may be prescribed by law by Parliament, as required by article 84(c).
It will by its own force bring in article 102 of the Constitution, for that Article lays down certain disqualifications which a presidential candidate must not have for he has to be eligible for election as a member of the House of the People.
But it is clear to us that, what is provided in clause (a) and (b) of article 58(1) must be taken from there and we need not travel to cls.
(a) and (b) of article 84 in the matter of citizenship and of age of the presidential candidate.
Clauses (a) and (b) of article 58(1) having made a specific provision in that behalf in our opinion exclude cls.
(a) and (b) of article 84.
This exclusion was there before the Amendment Act and we are of opinion that there is nothing in the Amendment Act which makes.
any difference to that position.
The Sixteenth Amendment was introduced on the recommendation of the Committee on National Integration and Regionalism, which was greatly concerned over the preservation and maintenance of the integrity and sovereignty of the Union.
It therefore recommended that every candidate for the membership of a State legislature or Parliament, should pledge himself to uphold the Constitution and to preserve the integrity and sovereignty of the Union and for that forms of oath in the Third Schedule to the Constitution should be suitably amended.
It also recommended that every candidate for the membership of Parliament or State Legislature, Union and State Ministers, Members of Parliament and State Legislatures, Judges of the Supreme Court and High Court and the Comptroller and Auditor General of India should take oath to.
uphold the sovereignty and integrity of India.
In consequence of these recommendations, the sixteenth amendment was made and article 84 (a) as well as article 173 which provides for qualifications for membership of State legislature were suitably 142 amended.
Further two new forms were added in the Third Schedule, one relating to oath to be taken by candidates for elector to Parliament and the other relating to oath to be taken by candidates for election to State legislatures.
Further other forms of oath in the Third Schedule were also amended by adding therein the words "I will uphold the sovereignty and integrity of India.
" Now if the intention of Parliament was that an oath similar in form to the oath to be taken by persons standing for election 10 Parliament had to be taken by persons standing for election to the office of the President there is no reason why a similar amendment was not made in article 58(1)(a).
Further if the intention of Parliament was that a presidential candidate should also take an oath before standing for election, the form of oath should also have been prescribed either in the Third Schedule or by amendment of article 60, which provides for oath by a person elected as President before he takes his office.
But we find that no change was made either in article 58(1)(a) or in article 60 or in the Third Schedule prescribing the form of oath to be taken by the presidential candidate before he could stand for election.
This to our mind is the clearest indication that Parliament did not intend, when making the Amendment Act, that an oath similar to the oath taken by a candidate standing for election to Parliament had to be taken by a candidate standing for election to the office of the President.
So there is no reason to import the provision of article 84(a) as it stood after the Amendment Act into article 58(1)(a), which stood unamended.
That is one reason why we are of opinion that so far as the election to the office of the President is concerned, the candidate standing for the same has not to take any oath before becoming eligible for election as President.
Another reason which leads to the same conclusion is this.
We have already indicated that no change was made in article 60 by introducing the form of oath 'to be taken by a person standing for election as President; nor was there any change made m the Third Schedule by the introduction of a form of oath to be taken by a person standing for election as President.
In the absence of such a form, we fail to see how an oath would be necessary before a person could stand for election.
as President.
It is not as if a person standing for election as a member of Parliament can take any oath that he likes or that may be administered to him.
The particular oath which a person standing for election as a member of Parliament has to take has been prescribed in the Third Schedule to the Constitution, and it is only that oath which such a person has to take.
However no form of oath is prescribed for a person standing for election as President anywhere in the Constitution and in the absence of such form, it is impossible to hold that taking of oath before standing for election as President is a 143 necessary ingredient of eligibility for such election.
Further a comparison of the form of oath under article 60 for the President with form III B of the Third Schedule which prescribes the oath for a member of Parliament before he takes his seat shows that even after election the President is not required to swear that he will uphold the sovereignty and integrity of India.
The oath he takes is to preserve, protect and defend the Constitution and that he will devote himself to the service and well being of the people of India.
Clearly therefore the form of oath introduced by the sixteenth amendment for persons standing for election to Parliament and even after election was not considered suitable for a person standing for election as President or elected as President and that is why we find no form prescribed by Parliament.
It has been urged on behalf of the petitioners that, though no form of oath may be prescribed it was open to the Election Commission to prescribe an oath by making changes mutatis mutandis in form III A of the Third Schedule relating to candidates for election to Parliament, and that it was the duty of the Election Commission to appoint somebody to administer the oath in the form to be evolved by him by changing form III A in the Third Schedule mutatis mutandis.
Reliance in this connection has been placed on article 324 of the Constitution.
We are of opinion that there is no force in this contention.
Article 324 inter alia provides for "the superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to Parliament and to the Legislature of every State and of elections to the offices of President and Vice President".
These words do not in our opinion give any power to the Election Commission to introduce a form of oath to be taken by a candidate for election whether it be for election as President or as a member of Parliament or of a State legislature.
If an oath has to be taken by any.such person it has to be provided by law and the form thereof has also to be prescribed by law (we are using the word "law" in its broadest sense, including constitutional provisions) and that is what was done by the Sixteenth Amendment so far as election to Parliament and State legislatures was concerned.
But as already observed, Parliament did not think it fit when it brought in the Amendment Act to make any change in article 58 (1) (a) or to introduce a form in article 60 or in, the Third Schedule to the Constitution with reference to candidates standing for election as President.
If Parliament did not choose to do so, the Election,Commission cannot do so under the power it has been given under article 324 to superintendent, direct and control the preparation of the electoral rolls and the conduct of all elections.
That power is very different from the power to prescribe, an oath before a candidate can stand for election.
Such prescription can only be by law as indicated above.
The Amendment Act having not made any such provision with 144 respect to those standing for election to the office of the President, it cannot be open to the Election Commission to prescribe a form of oath for such persons by changing form III A mutatis mutandis.
Such power cannot be spelt out of article 324 on which reliance has been placed on behalf of the petitioners.
It follows therefore that no form whatsoever having been prescribed by Parliament when it made the sixteenth amendment for taking an oath by a presidential candidate, article 84 (a) when it prescribed for taking an oath for candidates for election to the.
House of the People has no application to candidates standing for election to Presidentship.
So far as these candidates are concerned we must look to article 58 (1) (a) only and need not go to article 84(a).
Another reason for coming to the same conclusion is that when article 58 (1) (c) lays down that a person standing for election as President has to be qualified for election as a member of the House of the People it only brings in qualifications other than those= which are specifically mentioned in article 58 (1) itself.
Now specific qualifications provided in article 58 (1) are that a candidate for presidential election has to be a citizen of India and he must have completed the age of 35 years.
So far as these qualifications are concerned, we need not go anywhere else in order to search for eligibility to contest election as President.
For example, the specific qualification in cl.
(b) of article 58.(1) is that the person concerned should have completed the age of 35 years.
On the other Hand, el.
(b) of article 84 lays down the age of 25 years for membership of the House of the People.
Therefore when one has to look for the qualification of age one must only go to article 58 (1) (b) for the purpose of presidential election and need not look elsewhere.
What is specifically provided for by article 58 (1) must be accepted as it stands and no addition can be made to that provision and no subtraction can be made therefrom.
It will be seen therefore that though there may be some qualifications which may be necessary for election to the House of the People, they need not necessarily apply to the election for the office of the President, where there is a specific provision in article 58 (1) itself.
We are therefore clearly of opinion that in view of the specific provision in article 58 (a) and (b) we cannot and should not apply clauses (a) and (b) of article 84, to persons standing for election as President.
This conclusion is reinforced if we look at article 58 (2) and compare it with article 102 (1) (a).
It is clear that when there is a specific provision with respect to an office of profit in article 58 (2); it is that provision which will apply and not article 102 (1) (a).
We therefore hold that the acceptance of the nomination papers of respondents 1 to 17 by the Returning Officer was neither illegal nor contrary to law on the ground that these respondents did not subscribe to an oath under article 84 (a) read with article 58(1)(c).
The issue is decided against the petitioners.
145 ISSUE No. 3.
The petitioners rely on four allegations on the question of undue influence.
Before we deal with those allegations it is necessary to understand what undue influence is in the context of the Act.
Section 18 (1 ) (b) lays down that if the result of the election has been materially affected by reason of undue influence at the election committed by any person other than the returned candidate or a person acting in connivance with the returned candidate, the election will be liable to be declared void.
Sub section (2) of section 18 lays down that undue influence would have the same meaning as in Chapter IX A of the Indian Penal Code.
Section 171 C of the Indian Penal Code defines what "undue influence" is in these terms : "(1) Whoever voluntarily interferes or attempts to interfere with the free exercise of any electoral right commits the offence of undue influence at an election.
(2) Without prejudice to the generality of the provisions of sub section (1), whoever (a) threatens any candidate or voter, or any person in whom a candidate or voter is interested, with injury of any kind, or (b) induces or attempts to induce a candidate or voter to believe that he or any person in whom he is interested will become or will be rendered an object of Divine displeasure or of spiritual censure, shall be deemed to interfere with the free exercise of the electoral right of such candidate or voter, within the meaning of sub section (1).
(3) A declaration of public policy or a promise of public action, or the mere exercise of a legal right without intent to interfere with an electoral right, shall not be deemed to be interference within the meaning of this section.
" It will be seen from the above definition that the gist of undue influence at an election consists in voluntary interference or attempt at interference with the free exercise of any electoral right.
Any voluntary action which interferes with or attempts to interfere with such free exercise of electoral right would amount to undue influence.
But even though the definition in sub section
(1) of section 171 C is wide in terms it cannot take in mere canvassing in favour of a candidate at an election.
If that were so, it would be impossible to run democratic elections.
Further sub section
(2)ors.
171 C shows what the nature of undue influence is though of course it does not cut down the generality of the provisions contained in sub section (1).
Where any threat is.
held out to any candidate or voter or any person in whom a candidate or voter is interested and 146 the threat is of injury of any kind, that would amount to voluntary interference or attempt at interference with the free exercise of electoral right and would be undue influence.
Again where a person induces or attempts to induce a candidate, or voter to believe that he or any person in whom he is interested will become or will be rendered an object of Divine displeasure or of spiritual censure, that would also amount to voluntary interference with the free exercise of the electoral right and would be undue influence.
What is contained in sub section
(2) of section 1771 C is merely illustrative.
It is difficult to lay down in general terms where mere canvassing ends and interference or attempt at interference with the free exercise of any electoral right begins.
That is a matter to be determined in each case; but there can be No. doubt that if what is done is merely canvassing: it would not be undue influence.
As sub section (3) of section 171 C shows, the mere exercise of a legal right without intent to interfere with an electoral right would not be undue influence.
We may in this connection refer to section 123(2) of the Representation of the People Act 1951 which also defines "undue influence".
The definition there is more or less in the same language as in section 171 C of the Indian Penal Code except that the words "direct or indirect" have been added to indicate the nature of interference.
It will be seen that if anything, the definition of "undue influence" in the Representation of the People Act may be wider.
It will therefore be useful to refer to cases under the election law to see how election tribunals have looked at the matter while considering the scope of the words "undue influence".
The earliest case to which reference may be made is R.B. Surendra Narayan Sinha vs Amulyadhone Roy & 43 Others.(1) There the question raised before the Election Tribunal was whether by issuing a whip on the day of election requesting members to cast their preferences in a particular order, the leader of a Party, who was also the Chief Minister, could be said to have exercised undue influence.
The Election Tribunal held that the leader the party was entitled to use his influence as a leader and he could not be deprived of that right because he happened to.
be a minister.
The issue of a whip of that kind was thus held to be no more than canvassing in.
favour of the candidates of the party to which the leader or the Chief Minister belonged.
In Linge Gowda vs Shivananjappa(2), the Election Tribunal held that a leader of a political party was entitled to declare to the public the policy of the party and ask the electorate to vote for his party without interfering with any electoral right and such declarations on his part would not amount to undue influence under (1) 1940 Indian Election Cases by Sen and Poddar, Case No. XXX at p. 188.
(2) (1953) VI E.L.R. 288.
147 the Representation of the People Act.
The fact of that such a leader happened to be a Minister or Chief Minister of the State would make no difference.
It was further observed in that case that "the law cannot strike at the root of due influence and under the law of election, only undue influence is forbidden, and the leaders of ' a party will be deemed to exercise their due influence if they ask the electorate to vote for their party candidate, even if they happen to be Ministers." In Amirchand vs Surendra Lal Jha(1) it was held by the Election Tribunal that Ministers were prominent members.
of their party and in that capacity they were entitled to address meetings and to tell people what their party had done, and what its programme was and to ask them to vote for the candidate set up by their party, and such action of the Ministers could not be held amount to exercising undue influence.
It merely amounted to canvassing by the Ministers in favour of candidates belonging to their party.
In Mast Ram vs
section Iqbal Singh(2) it was held by the Election Tribunal that the legitimate exercise of influence by a political party or an association should not be confused with "undUe influence".
It was further held that "Ministers in their capacity as members of their party are entitled to address meetings and to tell people what their party had done and what its.
programme was and to ask them to vote for the candidate set up by their party.
Such action of the Ministers cannot be held to amount to 'exercising undue influence ' ".
It was further held ' that "if ' a political ' party passes a resolution of support to a candidate and asks its members to vote for him, it will be only a legitimate exercise of influence".
In Radhakrishna Shukla vs Tara Chand Maheshwar.(3) the Election Tribunal held that even where Ministers conducting an electioneering campaign promised people, who put their grievances before them during the campaign, generally to redress their grievances, it could not be held that there was exercise of undue influence and their promise merely amounted to a promise of public action, which would not be for the benefit of merely those who voted for candidates of their party but for the public as a whole.
The next case to which reference may be made is N. Sankara Reddi vs Yashoda Reddi(4).
In that case the Election Tribunal held that "a political party is entitled to issue a manifesto to the ' voters requesting them to vote only for the candidate, set up by the party.
The fact that the leader of the Congress Legislature Party who was also the Chief Minister of the State had written (1)(1954) X E L R 57.
(2) (1955) XII E.L.R.34 (3)(1956) XII E.L.R. 378.
(4) (1957) XIII E.L.R. 34.
148 letters to the members of the Congress Party to support the candidates set up by the party would not amount to undue influence within section 123(2) of the Representation of the People Act.
" It was added that it was only where a Minister abused his position for furthering the prospects of the candidate belonging to his party that undue influence might arise; but where a leader merely used his influence in the form of canvassing for candidates of his party there would be no question of undue influence.
In Dr. Y.S. Parmar vs Hira Singh Pal(1), the Judicial Commissioner of Himachal Pradesh held that "a leader of a political party is entitled to.
declare to the public the policy of the party, and ask the electorate to vote for his party without interfering with any electoral right and such declarations on his part would not amount to undue influence under section 123(2) of the Representation.
of the People Act.
" In Triloki Singh vs Shivrajwati Nehru(2) it was held by the Election Tribunal that "the right to canvass must be conceded to Ministers as leaders of a political party Just as they have a right to vote and to stand as a candidate, they also have a right to canvass for themselves and for the other candidates set up by their party.
" It was further held that though a Minister occupied a high position and commanded great influence, if he only solicited votes and tried to persuade the electors to vote for a candidate of his party and asked them not to vote for any other candidate or to remain neutral and did nothing more, he could not be said to interfere with the free exercise of the electoral right of the voters.
The last case to which reference may be made is Jayalakshmi Devamma vs Janardhan Reddi(3).
In that case the Andhra Pradesh High Court held that in a democratic set up where candidates contested elections on the basis of their affiliation to a particular political party, there was nothing intrinsically wrong in Ministers canvassing support for their party candidates.
It was further held that a Minister merely by reason of his office did not suffer from any disability in this behalf and had the same rights and obligations as any other citizen in the matter of canvassing.
It was also held that in their capacity as leaders of their party.
they had to explain to the electors the policies and programmes which they sought to enforce and one way of doing that was to ask the electors to vote for those who were pledged to support them and their policies.
It will be seen from the above review of the cases relating to undue influence that it has been consistently held in this country that it is open to Ministers to canvass for candidates of their party (1) (1958) 16 E.L.R.4 (2) (1958) XVI.E.L.R 234.
(3) (1959) XVII E.L.R. 302. 149 standing for election.
Such canvassing does not amount to undue influence but is proper use of the Minister 's right to ask the public to support candidates belonging to the Minister 's party.
It is only where a Minister abuses.
his position as such and goes beyond merely asking for support for candidates belonging to his party that a question of undue influence may arise.
But so long as the Minister only asks the electors to vote for a particular candidate belonging to his party and puts forward before the public the merits of his candidate it cannot be said that by merely making such request to the electorate the Minister.
exercises undue influence.
The fact that the Minister 's request was addressed in the form of what *is called a whip, is also.
immaterial so long as it is clear that there ' is no compulsion on the electorate to vote in the manner indicated.
It is in the light of these principles that we have to see whether the four allegations made in this case, assuming them to be correct, make out a case of undue influence.
The first allegation is that Shrimati Indira Gandhi, the Prime Minister, addressed a letter to all the electors in which she commended Dr. Zakir Husain and requested the electors to vote for him.
A copy of that letter has been produced, and we have been taken through it.
In our opinion there is nothing in that letter which may even remotely amount to undue influence.
Most of the letter is concerned with commending the qualities of Dr. Zakir Husain and it ends by saying that Dr, Zakir Husain 's long and meritorious service in the cause of national freedom and national re construction after Independence makes him a candidate richly deserving universal support.
It has been urged that the Prime Minister is a person of great influence and therefore Shrimati Indira Gandhi should not have written this letter because she was Prime Minister and the mere fact that she wrote this letter commending Dr. Zakir Husain 's election amounted to undue influence i.e. interference with the free exercise of the electoral right.
We can not agree with this contention.
Shrimati Indira Gandhi is certainly the Prime Minister, but she is also one of the leaders of the party to which Dr. Zakir Husain belonged.
As a leader of party she was entitled to ask the electors to vote for Dr. Zakir Husain and the fact that she is the Prime Minister makes no difference to her right to make an appeal of this nature.
It is said that the office of the President is a no party office and therefore an appeal of this nature should not have been made and must amount to undue influence.
It is true that the office of the President is not a party office meaning thereby that after his election the President is no longer a party man.
But that cannot take away the fact that in a democratic system, like ours, persons who stand for election are candidates sponsored by parties for without such support no one would have a chance of being elected, for the.
electors are mostly members of one party or other.
We have given 150 our earnest consideration to the letter written by Shrimati Indira Gandhi and have come to the conclusion that there is nothing in that letter which can be said to be improper or which can even remotely amount to interference with the free exercise of the electoral rights.
It cannot therefore be said that Shrimati Indira Gandhi even though she is the Prime Minister exercised any undue influence in this presidential election.
The next allegation is based on two letters written by Sri Ram Subhag Singh.
In these letters.
Sri Ram Subhag Singh signed himself as Chief Whip and they were addressed to all members of the Congress Party in Parliament.
The fact that he signed the letters as Chief Whip is in our opinion of no consequence; even if he had not done so all members of the congress party in Parliament must be knowing that he was the Chief Whip.
Just as a Minister has a right to canvass for support so has in our opinion the Chief Whip.
In the first letter he pointed out that the Presidential and Vice Presidential elections were to be held on May. 6, 1967.
He also pointed out that members of Parliament could vote for the presidential election at New Delhi or at State capitals but they had to come to Delhi in connection with the election of the Vice President.
He therefore added that as the two elections were to be held on the same day and voting for the Vice Presidential election could only be at Delhi, every member of the party must be present in Delhi to participate in the elections.
He finally requested the members of his party to reach New Delhi by May 4, 1967 and contact him on reaching.
New Delhi.
This letter merely explains to members of his party the situation with respect to the two elections which were to be held simultaneously and requested the members to come to Delhi, as otherwise they could not vote in the Vice Presidential election.
The fact that he asked the members to contact him after reaching Delhi could only be to know who had come and who had not and cannot give rise inference of undue influence from that fact alone.
In the second letter, Sri Ram Subhag Singh pointed out that the election to the office of the President would be in accordance with the system of proportional representation by means of single transferable vote.
He also invited the attention of the members of the Congress Party in Parliament to r. 19 of the Election Rules.
He then went on to say that it was their desire, i.e., of the congress party, that Dr. Zakir Husain should be returned with a thumping majority.
He therefore requested the members to place figure '1 ' opposite the name of Dr. Zakir Husain.
He also advised them not to mark the second or any other preference in favour of any other candidate.
As we read this letter we only find in it a request to members of the party to vote for Dr. Zakir Husain There is nothing in that letter to show that undue influence was being exercised thereby.
The two letters read together merely show 151 that Sri Ram Subhag Singh who happened to be the Chief Whip of the congress party was canvassing in favour of Dr. Zakir Husain.
It is however urged that his advice to the members not to mark their second or any other preference in favour of any other candidate amounted to interference with the free exercise of their electoral right.
We cannot agree with this contention.
Sri Ram Subhag Singh asked the members of his party to give the first preference to Dr. Zakir Husain.
He also asked them not to mark their second or any other preference, and that is a method to ensure that the candidate to whom the first preference is given should be in a strong position in case there is not a majority in the first counting.
In the present election there was apparently a majority in the first counting and therefore the marking of the second or any other preference was immaterial.
Apart from it.
we see nothing improper in members of the party being told in the course of canvassing that it would be better if they only marked their first preference and no other preference in a system where voting is by single transferable vote.
Such a request or advice does not in our opinion interfere with the free exercise of their electoral right for the electors still would be free to do what they desired in spite of the advice.
We cannot agree.
after going through the two letters written by Sri Ram Subhag Singh that there was any interference with the exercise of the electoral right by the electors.
The third allegation is that the Prime Minister had deputed certain senior members of her cabinet to the various States to make doubly certain that Dr. Zakir Husain was elected.
In consequence, Shri Fakhruddin Ali Ahmed was sent to Assam, Shri Y. B. Chavan to Bombay, Sri Jagjivan Ram to Bihar, Sri I.K. Gujral to Calcutta and Sri Dinesh Singh to Uttar Pradesh.
It is further urged that sending of the Ministers to various States was to influence the members of the electoral college there to vote for Dr. Zakir Husain or attempt to do so.
Such action it is urged.
would amount to undue influence.
We cannot agree with this contention.
Assuming that these Ministers were asked to go to various States it was obviously to canvass support for Dr. Zakir Husain so that he may be certain to be elected.
Even assuming that these Ministers canvassed support for Dr. Zakir Husain in various State capitals, their action cannot be said to amount to undue influence, for all that they can be said to have done was to canvass support for Dr. Zakir Husain and mere canvassing cannot possibly be; held to be undue influence.
There is nothing 'in the allegation in para 12 C of the petition to show that there was any interference with the free exercise of electoral right by the electors.
even if these Ministers were sent to.
the various State capitals to canvass support for Dr. Zakir Husain ,red did so.
Mere canvassing of support for a candidate can never amount to undue 152 influence, and all that para 12C shows is that there was mere.
canvassing in favour of Dr. Zakir Husain.
No case of undue influence can be made out on the basis of the allegations contained in para 12C of the petition.
The last allegation in support of the case of undue influence is that the Chief Minister of Maharashtra had briefed members of the Legislative Assembly on May 5, 1967 on how to vote and whom to vote for.
It is, urged that even if the leader of the party in the Maharashtra legislature could indicate the manner of voting the members of his party, he could not indicate to them whom they were to vote for, as that interfered with the free exercise of their electoral right.
It is said that such a request amounted to a command from a person in authority, like the Chief Minister, and would be exercise of undue influence.
We are of opinion that there is no substance in this contention either.
There can possibly be no objection if the leader of the party indicates to the members of his party how to vote in order to ensure that votes may not become invalid for want of knowledge of the procedure of voting.
Further if the leader of the party indicates to members of his party for whom to vote he is merely canvassing with his own party men to support the candidate of the party.
The mere fact that the person who, canvasses is a Chief Minister does not mean that he is exercising undue influence in the sense of interfering with the free exercise of the electoral right.
Once canvassing is permissible, and we have no doubt that in a democratic set up where ' parties put up candidates for election it is not only permissible but necessary, it follows that if a leader of the party asks members of his party for whom.
to vote he is merely canvassing.
The voting is after all secret and every elector is free to vote for whomsoever he likes, even though he may have been asked by the leader to vote for a particular candidate.
There is nothing in para 12 (D) of the petition to suggest that anything improper was.
done by the Chief Minister of Maharashtra, which could give rise to an inference that t.he free exercise of the electoral right was being interfered with.
On a careful consideration of paragraphs 12(A) to 12(D) of the petition we have come to the conclusion that there is nothing in those paragraphs which even remotely suggests that there was any undue influence exercised by anybody in connection with the Presidential election of May 6, 1967.
Our finding on the issue in question is that the acts.
and conduct alleged in paragraph 12 of the petition and set out in sub paras A to D thereof do not amount to undue influence within the meaning of section 18(1 )(b) of the Act.
The issue is decided against the petitioners.
As we have indicated already if both these issues of law are decided against the petitioners as we do decide them the petition 153 must fail and it is unnecessary to set it down for hearing on evidence with respect to other issues.
The petition is hereby dismissed but in the circumstances of the case we pass no order as to costs.
Y.P. Petition dismissed. | As a result of the Presidential election held in May, 1967, respondent No. 1 was declared elected.
The petitioners challenged the election on the following two grounds, namely (i) article 58(1)(c) required that a person to be eligible for election as President must be qualified for election as a member of the House of People.
After the Sixteenth Amendment, under article 84(a), it was necessary for a person standing for election to either House of Parliament to take an oath in the form prescribed in the Third Schedule.
Therefore, a person standing for election as President had also to take a similar oath; since the respondent had not taken the oath he was not eligible for election.
(ii) As (a) the Prime Minister addressed a letter to all electors commending respondent No. 1 and requesting them to vote for him; '(b) the, Prime.
Minister deputed Ministers 1 various State Capitals to make doubly certain that respondent No. 1 was elected; (c) a Minister who was also the chief whip of the Congress party wrote two letters to all members of his party in Parliament and signed them as Chief Whip, explaining the situation with respect to the election and requesting them to come to Delhi and contact him and also requesting them to give the first preference to respondent No. 1 and not to mark the second or any other preference in favour of the candidates; and (d) the Chief Minister of Maharashtra had briefed members of the Legislative Assembly as to how and for whom to vote, the result of the election has materially been affected by undue influence.
HELD: The petition must be dismissed.
(i) The candidate standing for election to the office of the President had not to take any oath before becoming eligible for election as President.
A comparison of article 58 with article 84 as it stood before the amendment shows that el.
(a) of article 84, corresponded to el.
(a) of article 58(1), as both provided that the respective candidates should be citizens of India.
It was therefore, not necessary to go to cl.
(a) of article 84 for the purpose of finding out whether a person woks eligible for election as President for the purpose of citizenship for that part of el.
(a) of article 84 was specifically provided for in el.
(a) of article 58(1).
Similarly, el.
(b) of article 84 corresponded to el.
(b) of article 58(1).
with this difference that it provided a special qualification as to age and therefore 134 one would not have to go to cl.
(b) of article 84 for the purpose of finding out the qualification as to age.
Clause (c) of article 58(1) clearly corresponded to el.
(c) of article 84 and reading them together it would follow that a person standing for election as President would require such qualifications as may be prescribed in that behalf by or under any law made by Parliament.
Further as el.
(c) of article 58(1) lays down that a person standing for Presidential election has to be qualified for membership of the House of the People, article 102 (which lays down disqualifications for members of Parliament) would also be attracted except in so far as there is a special provision contained in article 58(2), Thus cI. (c) or article 58(1) would bring in such qualifications for members of the House of the People as may as prescribed by law by Parliament, as required by article 84(c).
It will by its own force bring in article 102 of the Constitution, for that Article lays down certain disqualifications which a presidential candidate must not have for he has to be eligible for election as a member of the House of the People.
But it clear that what is provided in cl.
(a) and (b) of article 58(1) must be taken from there and it is not necessary travel to cls.
(a) and (b) of article 84 in the matter of citizenship and of age of the presidential candidate.
Clauses (a)and (b) of article 58(1) having made a specific provision in that behalf exclude cls.
(a) and (b) of article 84.
There is nothing in the Amendment Act which makes any difference to that position, for.
if the intention of Parliament was that an oath similar in form to the oath for membership of Parliament had to be taken by persons standing for election to the office of the President there is no reason why a similar amendment was not made in article 58(1) (a) and why the form: of oath not also prescribed either in the Third Schedule or by amendment of article 60.
which provides for oath by a person elected as President before he takes his office.
[140H 141E; 142B C] The particular oath which a person standing for election as a member of Parliament has to take has been prescribed in the Third Schedule to the Constitution, and it is only that oath which such a person has to take.
However, no form of oath is prescribed for a person standing for election as President anywhere in the Constitution and in the absence of such form.
it is impossible to hold that taking of oath before standing for election as President is a necessary ingredient of eligibility for such election.
The Amendment Act having not made any such provision with respect to those standing for election to the office of the President, it cannot be open to the Election Commission to prescribe a form of oath for such persons by changing form III A mutatis mutandis.
Such power cannot be spelt out of article 324 under which the Election Commission is conferred power to superintend direct, and control the preparation of the Electoral Rolls and the conduct of elections.
[143G 144B] Further.
a comparison of the form of oath under article 60 for the President with form III B of the Third Schedule which prescribes the oath for a member of Parliament before he takes his seat.
shows that even after election the President is not required to swear that he will uphold the sovereignty and integrity of India.
The oath he takes is to preserve.
protect and! defend the Constitution and that he will devote himself to the service and well being of the people of India.
the form of oath introduced by the sixteenth amendment for persons standing for election to Parliament and even after election was not considered suitable for a person standing for election as President or elected as President and that is why no form is prescribed by Parliament.
[143A C] (ii) Any voluntary action which interferes with or attempts to interfere with the free exercise of electoral right would amount to undue 135 influence.
It cannot take in mere canvassing in favour of a candidate at an election.
If that were so, it would be impossible to run democratic elections.
It is difficult to lay down in general terms where mere canvassing ends and interference or attempt at interference to with the tree exercise of any electoral right begins.
That is a matter to be determined in each case; but there can be no doubt that if what is done is merely canvassing it would not be undue influence.
[145G 146C] (a) There was nothing in the fetter of the Prime Minister which even remotely amounted to undue influence.
As a leader of the party she was entitled to ask the electors to vote for respondent No. 1 and the fact that she is the Prime Minister makes no difference to her right make an appeal of this nature.
It is.
said that the office of the President is a no party office and therefore an appeal of this nature should not have been made and must amount to undue influence.
It is true that the office of the President is not a party office meaning thereby that after his election the President is no longer a party man.
But that cannot take away the fact that in a democratic system, persons who stand for election are candidates sponsored by parties for without such support no fine would have a chance of being elected.
for the electors are mostly members of one party or other.
[149G 1SOB] (b) Mere canvassing of support for a candidate can never amount to undue influence.
There was no interference with the free exercise of electoral right by the electors, even if the Ministers were sent to the various Sate capitals to canvass support for respondent, No 1.
[148H] (c) The fact that the Minister signed the letters as Chief Whip was of no consequence; even if he had not done so all members of the Congress party in Parliament must be knowing that he was the Chief Whip.
Just as a Minister has a right to canvass for support, so has the Chief Whip.
The fact that he asked the members to contact him after reaching Delhi could only be to know who had come and who had not and could not give rise to any inference of undue influence from the fact alone.
There was nothing in the second letter also to show that undue influence was being exercised thereby.
The two letters read together merely show that the Chief Whip of the Congress party was canvassing in favour of respondent No. 1.
There was nothing improper in members of the party being told in the course of canvassing that it would be better if they only marked their first preference and no other preference in a system where voting is by single transferable vote.
Such a request of advice does not interfere with the free exercise of their electoral for the electors still would be free to do what they desired inspite of the advice.
[150B 151D] (d) There can be no objection if the leader of the party indicates to the members of his party how to vote in order to ensure that votes may not become invalid for, want of knowledge of the procedure of voting.
Further if the leader of the party indicates to members of his party for whom to vote he is merely canvassing with his own party men to support the candidate of the party.
The mere fact that the person who canvasses is a Chief Minister does not mean that he is exercising undue influence in the sense of interfering with the free exercise of the electoral right.
Once canvassing is permissible, and in a democratic set up where parties put up candidates for election it is not only permissible but necessary.
it follows that if a leader of the party asks members of his party for whom to vote he is merely canvassing.
The voting is after all secret and every elector is free to vote for whomsoever he likes, even though he may have been asked by the leader to vote for a particular candidate.
[152C F] 136 It is open to Ministers to canvass for candidates of their party standing for election.
Such canvassing does not amount to undue influence but is proper use of the Minister 's right to ask the public to support candidates belonging to the Minister 's party.
It is only where a Minister abuses his position as such and goes beyond merely asking for support for candidates belonging to his party that a question of undue influence may arise.
But so long as the Minister only asks the electors to vote for a particular candidate belonging to his party and puts forward before the public the merit of his candidate it cannot be said that by merely making such request to the electorate the Minister exercises undue influence.
The fact that the Minister 's request was addressed in the form of what it called a whip is also immaterial so long as it is clear that there is no compulsion on the electorate to vote in the manner indicated [ 149A C] R.B. Surendra Narayan Sinha vs Amulyadhone Ray & 43 Ors. 1940 Indian Election Cases by Sen and Poddar, Case No. XXX at p. 188.
Linge Gowda vs Shivananjappa.
(1953) VI E.L.R. 288, Amirchand vs Surendra Lal Jha, (1954) X E.L.R. 57, Mast Ram vs
section lqbal Singh, (1955) XII E.L.R. 34, Radhakrishna Shukla vs Tara Chand Maheshwar, (1956) XII E.L.R. 378, N. Sankara Reddi vs Yashoda Reddi (1957) XIII E.L.R. 34, Dr. Y.S. Parmar vs Hira Singh Pal.
(1958) XVI E.L.R. 45.
Triloki Singh vs Shtvrajwati Nehru, (1958) XVI E.L.R. 234 and Jayalakshmi Devamma vs Janardhan Reddi, (1959) XVII E.L.R. 302, referred to |
Appeals Nos. 356 and 357 of 1966.
Appeals by special leave from the Award of the Industrial Tribunal, Rajasthan in Case No. 9 of 1961.
Niren De, Addl.
Solicitor General, Sobhag Mal fain an( B. P. Maheshwari, for the appellant (in C. A. No. 356 of 1966 and respondent (in C. A. No. 357 of 1966).
782 M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for the appellants (in C. A. No. 357 of 1966) and respondents (in C.As.
No. 356 of 1966).
The Judgment of the Court was delivered by, Shelat, J.
These two appeals by special leave, one by the appellant company and the other by, its workmen are directed against the award dated May 4, 1964 of the Industrial Tribunal, Rajasthan to which reference was made under section 10(1)(d) of the .
The dispute referred to the Tribunal related to the workmen 's demand for bonus for the years 1956 57 to 1959 60.
By the said award the Tribunal disallowed the claim for 1956 57 on the ground that it was belated and allowed the demand for the rest of the years 1957 58 to 1959 60.
In working out the available surplus for distribution as bonus the Tribunal in general followed the Full Bench formula evolved by the Labour Appellate Tribunal in Millowners ' Association, Bombay vs Radhtriya Mill Mazdoor Sangh, Bombay(1) and approved by this Court in the Associated Cement Co. Ltd. vs Its Workmen.(2) The Tribunal worked out first the gross profits for the said years and the prior charges deductible therefrom and arrived at the available surplus.
For the year 1957 58 gross profits found were Rs. 28.29 lacs, Rs. 25.36 lacs for 1958 59 and Rs. 34.92 lacs for 1959 60.
There is no dispute about these figures.
The Tribunal then ascertained the prior charges deductible from the gross profits.
There is no dispute with regard to the figures for depreciation, income tax and wealth tax.
As regards interest allowable on paid up capital, the Tribunal allowed 6%.
per annum tax free interest for 1957 58 and the Company remanded interest at the rate of 8.57% by reason of a change in he Income tax law having been made during the year.
The Union, on the other hand, claimed that only 6 % interest should be allowed.
The Tribunal allowed a mean between the two, viz., 7 1/4.
There was no question of interest on working ;capital as it was not the Company 's case that any reserve was utilised as working capital similarly there is no dispute with regard to the rehabilitation charge for buildings allowed by the Tribunal.
Apart from the question.
as to interest allowable on paid up capital for the year 959 60, the main dispute.
in these appeals is with regard to the rehabilitation allowances in respect of plant and machinery for he three years in question and the method followed by the Tribunal in calculating them.
(1) [1950] I.I.J. 1247.
(2) 783 The Company ever since its commencement has been purchasing new and also old reconditioned machinery.
As regards new machinery the Company furnished, (a) cost to the Company, (b) the current price during the year 1963 64 and (c) percentage in the rise in prices.
The Company also furnished in respect of reconditioned machinery (a) cost to the Company and (b) estimated cost which its vendors would have paid if they had purchased it as new in the years in which the Company installed the old machinery.
In respect of the old machinery the cost to the Company and the estimated cost to the sellers according to the Company were as follows: Year Cost to the Estimated cost to Company the sellers (In lacs) (In lacs) Upto 1952 53 13.87 20.05 1953 54 to 1955 56 3.49 5.23 1956 57 1 40 2.10 9157 58 1 77 2.65 Total 20.03 30 03 The difference between the cost to the Company and the estimated cost to the sellers thus come to 150%.
No old machinery was purchased during 1958 59 and 1959 60.
The Company also produced quotations of prices for equivalent machinery current in year 1963 64.
The Union did not dispute (a) the figures of cost to the Company of the new machinery as given in its statement exhibit M2, (b) the figures of cost of old machinery to the Company and its estimated cost to the sellers as given in exhibit M 3 and (c) the quota tions of prices received by the Company in 1963 64 from manufacturers of these machines, both old and new, "except in the case of machinery installed, during the bonus years.
" The Tribunal worked out the rehabilitation requirements for the years 1957 58 to 1959 60 in a Chart which is Annexure A to the award.
Since the controversy in these appeals mainly centers round the figures of rehabilitation requirements allowed by the Tribunal it is expedient to set out that Annexure: 784 784(a) Period Cost Cost as Multi Total Less Balance shown by plier break Co. in down EX.
M. value 5% 1 2 3 4 5 6 7 1050 51 New 16.30 16.30 3.36 54.77 0.81 53.96 Old 13.37 20.05 67.37 Nil 67.37 1951 52 New 1.43 1.43 1.87 2.67 0.07 2.60 1952 53 New 2.18 2.18 1.47 3.21 0.11 3.10 1953 54 New 1.12 1.12 2.28 2.55 0.06 2.49 Old 1.24 1.86 2.28 4.24 .
. 4.24 1954 55 New 3.71 3.71 1.86 6.90 0.19 6.71 Old 1.95 2.93 1.86 5.45 Nil 5.45 1955 56 New 6.93 6.93 2.18 15.11 0.35 14.76 Old 0.30 0.45 2.18 0.98 Nil 0.98 1956 57 New 13.11 13.11 2.35 30.80 0.66 30.14 Old 1.40 2.10 2.35 4.93 Nil 4.93 1957 58 Now 3.39 3.39 1 3.39 0.17 3.22 Old 1.77 2.65 1 2.65 Nil 2.65 1958 59 New 12.95 12.95 1 12.95 0.65 12.30 1959 60 New 30.76 30.76 1 30.76 1.54 29.22 784(b) Minus deprociation Balance Divisor Annual Require ment 8 9 10 11 (Rupees in lakhs) Total cost as new & old Machy30.03 24.35 7 3.48 Depre written off upto 31 3 57 48.83 2.60 8 0.32 3.10 9 0.34 Investment as on 31 3 57 2.49 10 0.25 18.22 4.24 7 0.61 Total 96 98 6.71 11 0.61 . 5.45 7 0.78 14.76 12 1.23 0.98 7 0.14 30.14 1 3 2.32 4.93 7 0.70 3.22 14 0.23 2.65 7 0.38 11.39 12.30 14 0.88 12.27 29.22 14 2.08 14.35 785 It will be observed from Annexure A that the Tribunal accepted as regards new machinery the Company 's figures of cost and quotations as cost of replacement and dividing the cost of replacement by the original cost to the Company I worked out multipliers for each year.
This dispute, however, is with regard to the multipliers arrived at by the Tribunal in respect of old machinery.
In Annexure A, the Tribunal adopted 3.36 multiplier in res pect of old machinery installed in 1950 51, i.e., the same multiplier which it worked out in respect of new machinery installed during that year.
For the years 1953 54 to 1957 58 the Tribunal accepted the Company 's figures which were agreed to by the Union, viz., of cost to the Company and the estimated cost to their vendors if the latter had purchased that machinery as new in the respective years of installation.
The Company also produced quotations from manufacturers of machinery itemwise in its Confi Annex.
I and 2.
These quotations were for some machines for 1959 60, for some for 1960 61 and the rest for 1961 62.
It would be safe to say that the average cost of these machines was the cost prevalent in 1960 61.
Though the average cost of the machinery was thus available, the Tribunal in the case of old machinery worked out multiplier for each of these years and then arrived at the figure of Rs. 85.62 lacs as the total replacement cost of that machinery by multiplying the estimated cost to the seller with the multiplier.
The Company 's contention was that since the Company had fur nished quotations for all machinery including the old machinery, the Tribunal ought to have accepted those quotations as equivalent to replacement cost as it did in the case of new machinery instead of adopting the notional method of working out multipliers and then arriving at replacement cost by multiplying that multiplier with the estimated cost to the sellers.
A multiplier is the ratio between the original cost and the cost of replacement.
It is one of the methods of arriving at the hypothetical cost of replacement at a future date.
But where the cost of replacement is available through quotations and these quotations are not disputed by the Union it would not be necessary to resort to a hypothetical multiplier or if the multiplier must be ascertained it must be the ratio of the cost to the employer and the estimated cost of replacement actually proved through the quotations.
According to the Company in the case of old machinery the multiplier so calculated would be 1950 51 . 3.98 1953 54 . 7.83 1954 55 . 3.49 1955 56 . 2.47 1956 57 . 4.75 1957 58 . 2.29 786 The total cost of replacement of old machinery on the basis of these multipliers or in the alternative on the basis of the quotations would then come to Rs. 121.70 lacs instead Rs. 85.62 lacs, the difference being of Rs. 36.08 lacs.
Therefore, even if the divisor of 7 uniformly_ applied by the Tribunal in Annex.
A were to be accepted, as correct, Rs. 36.08/7=Rs. 5.16 lacs would have to be added for rehabilitation requirement for each of the bonus years.
If that is done the entire available surplus found by the Tribunal would be wiped out.
It will be seen from the Tribunal 's Annex.
A that so far as new machinery is concerned the Tribunal accepted the figures of original cost and the quotations furnished by the Company and worked out multipliers for/all the years from 1950 51 to 1959 60 by simply dividing the quotations by the original cost.
The question is, should not the Tribunal have also followed the same method in the case of old machinery when it had before it the estimated cost to the seller, i.e., the cost of old machinery if purchased as new in the year of installation and the quotations for that machinery.
If that were done there would be no necessity of finding out a notional multiplier.
In that event as seen above there would be a difference of Rs. 36.08 lacs which would have to be added to the figure of Rs. 85.62 lacs worked out by the Tribunal as total rehabilitation cost in respect of old machinery.
Mr. Ramamurti however argued that though the Union had not disputed the quotations those quotations were for the year 1963 64 when the Tribunal was adjudicating the dispute, that it is always necessary to first find out the multiplier and then work out the rehabilitation cost and that the cost of machinery in the bonus year or years must be reflected while working out the rehabilitation cost even if the year of replacement worked out from the average life of machinery is later.
It is now well established that in the case of old machinery the employees cannot insist that such machinery should be replaced by old machinery.
For working out rehabilitation cost of such machinery it is the cost of new machinery that is to replace the old which has to be taken into consideration.
The Company as aforesaid produced two kinds of figures both accepted by the Union and the Tribunal: (1) the estimated cost to the seller if he had purchased the old machinery as new in the respective years of its installation and (2) quotations of prices of machinery which would replace it.
The Tribunal had before it thus the cost of the machinery if it were new in the year of installation and the cost of its replacement by new machinery.
There was therefore no particular reason in distinguishing the old from the new machinery for the figures of costs and replacements in both the cases were on the footing that the old machinery was new machinery.
Therefore since the Tribunal accepted the quotations and worked out the multiplier in the case of new machinery by dividing the quotations by the original 'cost it ought to have 787 followed the same method in the case of old machinery as it had before it the cost of the old machinery as new and the cost or replacement, both unchallenged by the Union.
The question still is whether the quotations can be the sole criterion for working out rehabilitation cost.
The principle accepted in the Full Bench formula and approved by this Court in the case of Associated Cement Co. Ltd (1) was that payment of bonus is in recognition of the contribution of labour in the profits earned by the industry and to assist labour to overcome as far as possible the difference between the actual wage and the living wage.
The Formula at the same time accepted the point of view of the industry that investment made by it must imply a legitimate expectation of securing recurring returns and that could only be ensured by machinery being continuously kept in good working order.
Such maintenance would necessarily be to the advantage of the labour, for, the better the machinery the larger the earnings and the brighter the chance of earning bonus.
It is on this twin consideration that the amount necessary for rehabilitation is recognised as a prior charge on the gross profits when surplus profit for distribution as bonus is being worked out.
It is true that depreciation is allowed by the tax laws but that is only to the extent of a percentage on the written down value.
The depreciation fund set apart on that basis would obviously be insufficient for rehabilitation and therefore an extra amount would have to be annually set apart notionally to make up the deficiency.
That is the reason for the Full Bench formula having accepted the industry 's claim to rehabilitation in addition to the admissible depreciation.
While ascertain in the claim of rehabilitation the Tribunal has first to ascertain the cost of the machinery to the employer and then to estimate its probable future life.
It then becomes possible to anticipate approximately the year when the machinery would need replacement and it is the probable price of such replacement at such future date that ultimately decides the amount to which the industry is entitled by way of replacement cost.
The question is how to estimate the probable price of machinery at such future date? As observed in the Associated Cement Company 's case(1) such probable price can be considered itemwise where the industry does not own too many factories and In itemwise study of machinery is reasonably possible.
It is when the industry owns several factories and the number of plant and machinery is so large that it becomes difficult to make an estimate of replacement cost itemwise that the estimate has to be block wise.
In either case the Tribunal has to estimate the probable cost of replacement at the time when such replacement would become due.
Such in estimate depends obviously on several uncertain factors.
The estimate of the probable life of machinery is itself a matter of anticipation and (1) L/p(N)7SCI 11 788 the estimate of the probable trend of price during the In tervening period is also to a degree a matter of conjecture.
However, the entire process of ascertaining replacement cost is hypothetical depending largely on expert evidence.
It would appear therefore that whenever it is possible.
to estimate itemwise the probable cost of machinery in the year of replacement, such a method is not only permissible but is more desirable.
The block wise estimate has to be resorted to when item wise estimate is not possible.
Where therefore there is clear evidence of the probable price of each piece of machinery itemwise when replacement is to become due, it would be more accurate to proceed on the basis of such price and it would not be necessary to find out multipliers, such multipliers being after all the ratio between the: cost, and the probable cost of replacement, ascertained from the trend of prices during the intervening years.
The multiplier thus is at best an approximation arrived at from the trend of price level during the intervening period.
But where the cost of replacement is ascertained from quotations of prices for the year of replacement such cost is more accurate than a notional one worked out from the multiplier.
It is therefore not always necessary to arrive at a multiplier for estimating the probable cost of replacement.
In the instant case the Tribunal estimated the life for old machinery at 10 years and that for new machinery at 15 years after taking into consideration the fact that the machinery was worked at least since 1955 56 on three shifts a day and the fact that it is being used for manufacturing precision machines.
On this basis the old machinery installed in 1950 51 became due for replacement in 1960 61 and the rest of it installed in succeeding years would become due after 10 years from the respective years of its installation.
It is in evidence that though the average life of the old machinery was exhausted it was still being worked though uneconomically.
It was agreed that the entire machinery needed immediate replacement and this fact was accepted by the Tribunal.
It is well established that an employer cannot be allowed to postpone the date of replacement on the footing that he has operated the machinery in fact beyond its average life and thus boost the cost of replacement taking advantage of the rise in price every year.
In the instant case however 'that cannot be said to be the position.
As stated earlier, the quotations produced by the Company represented an average price as near as possible prevailing during the period for replacement.
Since they were not disputed by the Union they were the best available data.
There was therefore all the more reason for the Tribunal to have worked out the cost of replacement from these undisputed quotations instead of working: out the multipliers and then arriving at the total re. placement cost.
On the basis of these quotations even if the multipliers were to be worked out the multipliers and the cost of replacement of old machinery would be as follows: 789 Old machinery esti Replacement cost Multiplier Year mated cost to the proved byquota seller if he had pur tions disputedby chased as new in the the Union year of its installa tion not disputed by the Union (Rs. in lacs.) (Rs. in lacs) 1950 51 20.05 79.72 3.98 1953 54 1.86 14.57 7.83 1954 55 2.93 10.25 3.49 1955.56 0.45 1.11 2.47 1956 57 2.10 9.97 4.75 1957 58 2.65 6.08 2.29 30.04 121.70 The replacement cost thus arrived at would be Rs. 121.70 lacs as against Rs. 85.62 lacs as worked by the Tribunal.
Indeed, where the cost of replacement is proved itemwise from price quotations and they are undisputed it becomes difficult to appreciate how the total cost of replacement can be less than the cost proved through quotations.
Counsel for the Union, however, urged that while working out the replacement cost it is the cost during the bonus year which is relevant and therefore though the Union had accepted the quotations they would not be the proper criterion and the price prevalent during each of the bonus years would be the relevant price.
He also argued that.
even if the quotations were to be accepted as cost of replacement the prices of only those machines which are required for replacement and not for expansion which can be the basis of estimation.
As regards the first argument, a similar contention was raised in Associated Cement Co. 's case(1) and was rejected.
At p. 967 of the report the Court said: "What the Tribunal has to do in determining such cost (i.e., probable cost of replacements) is to project the price level into the future and this can Be more satisfactorily done.
if the price level which has to be projected in future is determined not only in the light of the prices prevalent during the bonus year but also in the light of subsequent price levels.
" The submission that it is the price level during the bonus year which is the criterion therefore is not correct,.
The test is the probable cost of replacement when rehabilitation becomes due, If the bonus year and the year of rehabilitation coincide the price (1) 790 level during the bonus year would no doubt be the relevant basis.
But where they do not coincide and the due year of rehabilitation is the year beyond the bonus year that which is relevant is the probable cost of replacement during that year and the Tribunal therefore would have to consider all relevant evidence necessary to estimate the cost during that future year.
Where there is tangible evidence through quotations of prices for that year and such quotations are not in dispute the Tribunal does not have to conjecture what the trend of price level would be by taking into consideration the price level during the intervening period which would include the bonus year.
However this does not mean that the Tribunal must mecha nically accept the quotations.
The rehabilitation cost allowed under C the Full Bench formula is the probable cost of rehabilitation which while including modernization does not include expansion.
But the distinction between modernization and expansion may in some cases be subtle and not capable of clear distinction.
The question therefore would always be whether replacement of one machine by a new one is the introduction of modem machinery or one which is an item of expansion.
If it is an item of expansion its cost naturally has to be excluded.
The test is whether by the introduction of the new machinery the production capacity is likely to be significantly augmented, If that is found the Tribunal would have to apportion the cost on the basis that replacement is partly modernization and partly expansion.
On the other hand, E if the increased production is not significantly on the higher side it would be a case of modernization incidental to replacement.
The question is on whom is the burden of proving whether a given replacement amounts to.expansion,or modernization.
It seems to us that since it is the employer who seeks replacement cost, it is for him to satisfy the Tribunal as to what will be the overall cost of replacement and in doing so it is he who must satisfy that the cost is of replacement only and does not include any expansion of machinery.
Counsel for the Union was therefore right in saying that the Tribunal has to satisfy itself that no cost of expansion is injected in the rehabilitation cost.
In the present case, however, it does not appear from the record that any question of expansion Garose as the Union accepted the quotation as equivalent to the replacement cost.
Consequently, the Tribunal proceeded on the footing that the entire machinery had become due for replacement and the prices proved by quotations were of machines to be replaced in the process of replacement and modernisation and not expansion.
According to Rajendra Mills Ltd(1) the employer has to discharge this burden by adducing proper evidence and giving the other party an opportunity to, test the correctness of that evidence by cross examination and merely bringing on record balance sheets, for instance, would not be enough.
(see also the Workmen vs The National Tobacco Co.(2).
(1) (2) [1966] II L.L.J. 200.
791 But in the present case there is no question of the Company not having properly discharged the burden, for, it not only produced balance sheets but also produced statements, quotations and examined two expert witnesses, Jones and Desai.
These witnesses were cross examined on the statements relied on by the Company in regard to the cost to the Company, the estimated cost of replacement, the average life of machinery etc.
The Union also the Confidential Annexs.
1 and 2 which showed itemwise the cost of replacement as proposed by the Company and quotations of prices therefor.
These Annexs.
also indicated that where a machine was to be replaced not by the same kind but by a modern one it was to be substituted for two or more of the old machines.
This was presumably done to avoid expansion.
It is true that in respect of the old machinery installed in 1953 54 and 1956 57 the multiplier calculated on the basis of the quotations comes to 7.83 and 4.75 respectively while it ranges from 2.29 to 3.98 for the rest of the years.
At first sight the multiplier might suggest that there might be an element of expansion in the case of those machines.
But it was pointed out that the prices of those particular machines had gone unusually high and furthermore that in the process of replacement the modern machines which were to replace the old ones were in the approximate proportion of one for two.
It cannot therefore be validly said that the Company had not placed sufficient materials to enable the Union to check up by cross examination whether this was a, case of expansion or not.
Mr. Ramamurti 's contention next was that even though the quotations were not disputed by the Union, taking them as the sole basis for estimating the replacement cost was not satisfactory as the Union had qualified its acceptance by a reservation that it did so except for machinery installed in the bonus 1 years.
This argument does not appear to be tenable.
Exhibit M2 shows that so far as the bonus years are concerned old machinery was installed in 1956 57 and 1957 58 only.
The cost of such machinery for 1956 57 was Rs. 1,39,871 and that for 1957 58 was Rs. 1,76,730.
On the basis of the Union 's reservation the Tribunal did not accept the quotations for machinery installed in those years and fixed the replacement cost on the basis of multipliers calculated by it de hors the quotations.
It is difficult to comprehend such an approach by the Tribunal.
The Tribunal accepted the quotations in regard to the rest of the machinery and worked out the multiplier on the basis of those quotations.
The Union did not challenge those quotations and the multiplier calculated therefrom.
If the quotations for the new machinery for all the years and for old machinery for the years, except the bonus years, were accepted by the Union and the Tribunal also, there is no reason why the quotations for the bonus years could be said to be unacceptable.
, No objection to the replacement cost of the new machinery was taken even in regard to the bonus years.
As regards the old.
machinery the Union accepted the Company 's figures both as to cost to the Company and the estimated cost to the seller if he had 792 purchased it as new.
Even if a multiplier has to be calculated it would be the ratio between the estimated sellers cost and the probable cost of replacement.
So calculated both the old and new machinery stand on the same footing because it is the seller 's estimated price if he had purchased it new in the year of its installation that was taken by the Tribunal for arriving at the multiplier.
That being so, the multiplier in both the cases would he the ratio between the cost in the case of new machinery and the estimated cost to the seller in the case of old machinery and the cost of replacement proved by the Company through quotations.
If the quotations were acceptable to the Union in regard to new machinery and the old machinery installed in the years except the bonus years it is difficult to understand how quotations for the old machinery installed in bonus years could be questioned especially as the Union did not produce any data, to prove them incorrect.
, In these circumstances, we are of the view that the multipliers arrived at by the Tribunal in the case of old machinery ,were not correct.
The Tribunal should have either calculated the replacement cost from the quotations proved by the Company itemwise or if it had to work out the multiplier it should have done so by finding out the ratio between the estimated cost to the seller accepted by the Union and the quotations proved by the Company.
The deficiency in following this method comes to Rs. 36 lacs and odd as stated earlier.
Regarding the new machinery purchased during the bonus years the Tribunal held that the price rise for such machinery cannot be taken to be more than zero.
In exhibit M2 the Company has given the quotations for this machinery and has worked out therefrom the multiplier for each of the bonus years, viz., 2.35 for 1956 57, 3.37 for 1957 58, 1.48 for 1958 59 and 1.66 for 1959 60.
Presumably the Tribunal thought that though the prices for this machinery in 1963 64 were available, considering that its life was 15 years it was too early to find out with any precision the trend of prices during the intervening years.
With the gradual growth of indigenous production and corresponding availability of these machines it would be difficult to say whether the same trend would continue or not by the time the year for its replacement was reached.
It is not possible to say therefore that the Tribunal 's view that the price rise of such machinery should be taken as zero was unreasonable.
In the case of machinery purchased in 1950 51 and onward its period of replacement would commence from 1965 and onwards.
It was possible from the quotations produced by the Company to predicate for such machinery the trend of price but not so in the case of machinery purchased in very recent years.
In their case the quotations may not be taken for granted as showing any definite trend in price level.
As stated earlier, the Tribunal has given in Annex.
A a uniform remainder life of 7 years to old machinery irrespective of the year of its installation.
in our view, is not correct.
Taking 793 the life of old machinery to be 10 years, the old, machinery purchased in 1950 51 would require replacement in 1960 61 and so on. 'In.
that case the remainder life in the bonus year 1957 58 of old machinery installed in 1950 51 would clearly be 3 years, of old machinery installed in 1953 54, 6 years, of old machinery installed, in 1955 56 8 years, of machinery installed in 1956 57 9 years and that installed in 1957 58 10 years.
The divisor therefore could not be the uniform 7 for all these years but a graduated one on the basis that the estimated life of old machinery was 10 In estimating the rehabilitation requirement of each year the graduated divisor should have been used.
The question which raises a serious controversy is with regard to the figure of Rs. 24.35 lacs found, by the Tribunal as the total cost of rehabilitation in respect of machinery both old and new installed in 1950 51.
Dividing this figure by 7 as the remainder life for both the types of machinery the Tribunal allowed Rs. 3.48 lacs as the rehabilitation requirement for that year.
Counsel for the Company objected to the Tribunal 's calculations on various grounds.
It will be seen from column 7 of Annex.
A that whereas the Tribunal accepted the Company 's quotations for new machinery it did not do so in the case of old machinery and calculated instead the replacement cost by means of a multiplier.
It is difficult to say on what principle the multiplier 3.36 for old machinery was adopted except that the Tribunal adopted the same multiplier which it calculated in the case of new machinery by working out the ratio between the cost to the Company and the price of replacement as appearing from the quotations.
Since the Tribunal adopted that principle for new machinery it would be logical that it should similarly do so in the case of old machinery also as the basic cost adopted was the cost price to the seller if he had bought that machinery as new in 1950 51.
The total cost of machinery old and new would in that case be Rs. 54.77 lacs plus Rs. 75 lacs, i.e. Rs. 133.77 lacs instead of Rs. 54.77 lacs less 5 % break down i.e., Rs. 53.96 lacs for new and Rs. 67.37 lacs for old machinery as calculated by the Tribunal.
The figure of Rs. 67.37 lacs was arrived at by multiplying Rs. 20.05, the estimated cost to the seller by the multiplier 3.36.
According to the Tribunal the gross replacement cost would be Rs. 121.33 lacs instead Rs. 133.77 lacs.
The figure of Rs. 121.33 lacs arrived at by the Tribunal cannot be sustained as it was not justified in calculating replacement cost for the new machinery in one way and that for the old machinery in another way.
The next miscalculation said to have been committed by the Tribunal was in deducting the depreciation for the entire old machinery installed during 1950 51 to 1957 58, i.e., Rs. 30 lacs from the total replacement cost for 1950 51.
The Tribunal took the whole of the cost of old machinery to the seller, i.e., Rs. 30 lacs, as depreciation.
For that the Tribunal derived support from the 794 decision in South India Millowners ' Association and Ors.
vs Coimbatore District Textile Workers ', Union and Ors.(1) where while dealing with old machinery.
this Court has said that where purchase price is determined but it is difficult to ascertain the depreciation amount thereafter then at the highest the whole of the purchase money would be taken as depreciation amount.
Assuming that the Tribunal was entitled to treat the price of the old machinery, viz., Rs. 30 lacs as depreciation it was not correct on its part to deduct it from the replacement cost.
The reason is that it also deducted Rs. 48.8 3 lacs (to which we.
shall presently refer to) which amount includes depreciation of Rs. 30 lacs.
The Tribunal thus deducted Rs. 30 lacs as depreciation twice over.
The deduction of Rs. 30 lacs was thus clearly an error.
Counsel for the Company next objected to the sum of Rs. 48.83 lacs having been deducted from rehabilitation cost in respect of machinery, old and new, installed in 1950 51.
The objection was two fold: (1) that the Tribunal erred in deducting the whole of this amount from the rehabilitation cost in respect of 1950 51 machinery, and (2) that the said amount represents total deprecation, i.e., the notional Written down value of all machinery up to the year 1956 57 and is shown as such in the balance sheet for 1956 57.
It was urged that, since this amount represents depreciation on various kinds of assets, viz., bungalows, plants and machinery, cars and trucks, furniture and tools and implements, the whole of this amount should not be deducted when calculating rehabilitation provision for the machinery of 1950 51 and should be deducted only when calculating rehabilitation provision for each item in respect of which this depreciation has been included in the accounts.
We do not think that this submission can be accepted.
No doubt, the sum of Rs. 48.83 lacs represents depreciation up to 31 3 1957 in respect of plant, machinery, buildings, as well as other items of property, but there is no principle which requires that depreciation fund in respect of a particular item must only be utilised in rehabilitating the same item.
The Tribunal held that the entire depreciation fund must be utilised for rehabilitation of those items of property which require rehabilitation at the earliest point of time, that is the machinery of 1950 51 which needed replacement earlier than the other items of property.
We do not think that this decision of the Tribunal was in any way unreasonable as would justify interference.
As regards the second objection the principle is that while arriving at the rehabilitation cost deduction should be made of all available funds.
It was argued that an amount which is a notional depreciation mentioned in the accounts for the purpose only of showing the true Value of fixed assets would not be a reserve which in point of fact can be said to be available for replacement, and that it is on account of this that the decisions mention reserves including (1) 765 depreciation reserve which, if available, are liable to be deducted from rehabilitation cost.
The contention is that this amount being merely a notional depreciation is a mere paper entry and does not represent any available reserve.
Reliance was placed on G. F. Mills vs Its Workmen(1) where the Court set aside deduction of Rs. 30 lacs; the Company had raised a debenture loan of Rs. 50 lacs on credits on the ground that that amount was locked up in Pakistan and could not be brought to India for the Company 's use.
it was argued that the principle thus is that the amount to be deducted must in reality be available to the employer for replacement.
As found by the Tribunal the Company 's fixed assets were of the value of about Rs. 110 lacs.
The Union 's contention was that as against this amount the Company 's subscribed capital was Rs. 60 lacs; the Company had raised a debenture loan of Rs. 50 lacs on the security of its fixed assets and thus the subscribed capital and the debenture loan were sufficient to meet the whole cost of the fixed assets.
On this basis the Tribunal upheld the Union 's contention that Rs. 48.83 lacs shown as depreciation were available towards replacement cost as no part of it could have gone in the investment of fixed assets.
Counsel for the Company, however, pointed out that the debenture loan was raised in ' 1958 59 and therfore that amount cannot be said to be available at any rate during the year 1956 57.
But this fact taken in isolation does not furnish a correct picture of the fund available to the Company during the bonus years.
The balance sheets show that besides the said loan of Rs. 50 lacs the Company had obtained 'a, secured loan of Rs. 6.50 lacs in 1956 57 and another loan of Rs. 24.68 lacs in 1957 58.
Except producing the balance sheets the Company led no evidence to show as to how these loans had been utilised, whether as working capital, or in acquiring fixed assets.
Apart from this fact, we do not see how the fact that the debenture loan was raised in 1958 59 makes any difference.
Though the life of a large part of the machinery had run out the Company had not replaced any of it and was carrying on its work with the worn out machinery even though its working was uneconomical.
The Tribunal has found and the parties also were agreed that the entire machinery required immediate replacement.
Therefore, the question was how much rehabilitation cost the Company would require.
In calculating such cost the Tribunal was entitled to take note of the fact of Rs. 50 lacs having been raised as debenture loan on the security of its fixed assets presumably because that loan was required for rehabilitating the fixed assets.
Even so, Counsel argued, the question would still be whether Rs. 48.83 lacs represented an available fund for rehabilitation or whether they represented a mere paper entry for showing the true value of machinery in 1956 57.
In our view. it is not necessary for us to go into the question whether a sum shown as notional depreciation without its being shown as reserve can be treated or (1) A.I.R. 1958 S.C. 382.
796 not as a fund available for rehabilitation nor whether such depreciation is or is not deductible even if it is not available as a fund.
The Company produced, exhibit M 4 showing the, amount which according to it was required for rehabilitation for the bonus years.
According to that statement the Company would require Rs. 110.20 lacs, Rs. 127.06 lacs, Rs. 149.87 lacs and Rs. 155.91 lacs for the four bonus years respectively.
In working out these amounts the Company itself deducted Rs. 48.25 lacs from the rehabilitation requirement for the year 1956 57 and pointed out in a footnote that that amount was comprised of an investment of Rs. 18.22 lacs in stocks and shares and Rs. 30.03 lacs as depreciation, taking the entire estimated cost to the seller of old machinery if such seller had purchased it as new.
In face of this admission it is difficult to appreciate how the Tribunal can be said to have erred in treating Rs. 48.83 lacs as available fund.
We may also mention that before the Tribunal the argument was not that the amount of Rs. 30.03 lacs was merely a notional depreciation and not a fund actually available to the Company.
The Company 's contention on the contrary was that the whole of Rs. 48.83 lacs was utilised in fixed assets and therefore was not available for replacement.
The Tribu nal rejected that contention on the ground that except for the balance sheet which did not give precise information as to how that amount was deployed by it.
the Company had not produced.
its accounts to show that that amount was utilised towards acquiring fixed assets.
Counsel argued that if that was the view of the Tribunal the Company ought to have been given an opportunity of showing its sources of fixed assets.
There is no merit in this contention.
It was the Company who had the necessary information.
The onus was on the Company to explain from its accounts and other data that the amount of Rs. 30 lacs and odd was not available.
As regards Rs. 18.22 lacs the amount being an investment in liquid assets it is difficult to say why the Tribunal was not justified in treating it as available for rehabilitation.
But the Company 's contention was that the investment of Rs. 18.22 lacs in shares can either be treated as a, trading transaction carried out in the ordinary course of business or as a capital asset.
If it was treated as a trading transaction the Tribunal ought to have allowed Rs. 1.72 lacs which was the loss in 1957 58 in these shares as trading expenditure and the Tribunal ought not have added that amount to the gross profits for that year.
In doing so, the Tribunal treated the investment as capital asset and it could not therefore deduct Rs. 18.22 lacs as a fund available for rehabilitation cost.
We fail to see any contradiction on the part of the Tribunal.
The balance sheet for the year 1956 57 contains two Schedules , Sche dule A shows fixed assets and Schedule B shows trade investments of the value of Rs. 18,21,571 / .
The Company not being an investment Company the investment of Rs. 18.22 lacs in shares of other joint stock Companies prima facie represents extra capital not required as working capital for otherwise the Company could not have spared this amount for investment in the stocks of other 797 companies.
The Tribunal was right in treating this investment as a capital asset and in refusing to treat the loss therefrom as trading expenditure.
The Tribunal at the same time could deduct this amount from the rehabilitation cost because that amount was available to meet the rehabilitation cost.
The investment in shares could easily, if the Company was so minded, be converted into cash and utilised for replacement of its worn out machinery.
But it was said that even if the amount of Rs. 18.22 lacs could be held deductible that figure was not correct, for the value of investment was ,Rs. 11.23 lacs at the close of the year 1957 58 as shown in the balance sheet for that year.
This contention is not correct.
What appears to have been done in 1957 58 was that instead of showing the entire investment of Rs. 18.22 lacs as trade investments as in the previous year, the investments, were classified into investments and current assets.
The value of investments at the beginning of the year is shown at, Rs. 18.22 lacs but at the close of the year the shares of companies other than the National Bearing Company (Jaipur) Ltd., a subsidiary of the appellant company, were regrouped and shown as current assets and their cost was shown at Rs. 6.57 lacs instead of Rs. 13.71 lacs as shown at the close of the preceding year.
Except producing the balance sheet for 1957 58 the Company gave no explanation before the Tribunal as to why these investments were re grouped and on what footing they were revalued.
Besides, the figure of Rs. 18.22 lacs does not appear to have been disputed before the Tribunal and the Tribunal was never told that the investments during that year were reduced to 'Rs. 11.23 lacs.
It would not therefore be, right to say that the Tribunal erred in taking Rs. 18.22 lacs as a, fund available for rehabilitation.
The next contention was as to 7 1/4 % interest allowed by the Tribunal on paid up capital instead of 8.57% claimed by the company.
By the Finance Act of 1959 the provision in the Income tax Act that the Income tax paid on dividend distributed to the shareholders was deemed to have been paid on behalf of the shareholders was abrogated.
The contention was that though the corporation tax was reduced in that year from 51.5% to 45% the Company since 1959 had on the whole to bear at larger burden of tax and therefore the Company would not get a net tax free 6 % interest unless interest at 8.75% was granted.
It is true that the Full Bench formula, provided for payment of net interest at 6% per annum on paid up capital, but as pointed out in the Associated Cement Co. 's cave(1) and subsequent decisions of the Tribunals the rate of 6 % interest is not to be regarded as something inflexible.
In awarding interest on paid up capital and also on working capital the proper approach is that the industry is entitled to a reasonable return on investments made in establishing and running concerns it its risk.
At the same time the claim for bonus is no longer treated as an ex gratia payment.
It is recognised on the consideration that (1) 798 labour is entitled to claim a share in the trading profits of the industry as it partially contributes to the same.
Since the industry and labour both contribute to the ultimate trading profits both are entitled to a reasonable share.
While awarding interest if the Tribunal were to find that if it were to grant 6 % interest on paid up capital, nothing or no appreciable amount would be left for bonus, it can adjust the rate of interest so as to accommodate reason ably the claim for bonus and thus meet the demands of both as reasonably as possible.
If the Tribunal were to award interest at a rate lower than 6% after considering all the relevant facts we do not think that the employer can legitimately claim that it has erred in doing so.
If the Tribunal has exercised its discretion after consideration of all the relevant facts this Court would not ordinarily interfere with such exercise of its discretion.
These were all the contentions raised by Counsel for the Company in the Company 's appeal To the extent that we Accept as hereinabove the Company 's contentions, Annexure A to the award will have to be modified.
These modifications are shown in the charts thereto annexed and collectively "A".
We now proceed to consider the Workmen 's appeal.
Counsel for the Union argued that the Tribunal ought to have fixed the life of the Dew machinery at 25 years as is usually done and not at 15 years.
In some cases, it is true that Tribunals have fixed 25 years as the machinery 's average life.
There can however no rigidity in fixing the life of machinery, since it differs from industry to industry.
Consequently, there can be no hard and, fast rule applicable to all sorts of machinery.
The Millowners ' Association, Bombay(1) and South India Millowners ' Association(2).
In the present case the Tribunal had before it evidence showing that the industry required machinery of special precision and was therefore not comparable with machinery such as that in textile mills for which 25 years ' life was fixed.
In suggesting the life of 25 years for this machinery Counsel for the Union did not give any specific reason except that 25 years of life has been fixed in some cases.
He could not also show any instance where in a similar industry life of machinery was fixed for more than 15 years.
The principle that the Tribunal has to bear in mind is that the life of machinery is the period during which it is estimated to work with reasonable efficiency and not the period during which it has actually been operated, that is, till it becomes too deteriorated for use.
(Pierce Leslie & Co. vs Its Workmen.)(3) Since the Tribunal fixed the period of 15 years after considering the evidence and the nature of industry there is no reason why its determination need be interfered with.
(1) (2) [1962] Suppl, 2 S.C.R. 926.
(3) ; at 200.
799 Counsel 's next contention was that the Tribunal ought not to have accepted the quotations which were for 1963 64 as the basis for calculating the total rehabilitation cost.
But the quotations were never disputed by the Union.
Even so. argued Mr. Ramamurti, they contained the cost of spares which at any rate ought to have been excluded.
We confess it is difficult to appreciate this part of the argument.
The machinery in question is in a large way imported machinery.
It is common knowledge that when such machinery is purchased spares are generally included in such purchase and their cost must be included in the purchase price, the reason being that in case of breakdown the Company would not have to wait for an indefinite period for ordering and obtaining, the spares.
It was then said that the new machinery which would replace the old might well contain items of expansion which the Tribunal ought to have reckoned and excluded.
While dealing with the Company 's appeal we have already dealt with this aspect and for the reasons stated there this argument must be rejected We must also reject the argument that the Tribunal had disregarded the increasing trend of indigenous manufacture of machinery.
In fact; Confidential Annexs.
1 and 2 produced by the Company contain quotations wherever possible of a number of machines of indigenous manufacture.
The next contention related to old machinery and the argu ment was that the Company had discarded machinery worth about Rs. 18 lacs in respect of which the Company ought not to get any rehabilitation cost.
The argument appears at first sight attractive but loses its force when the actual position is ascertained.
The balance sheet for the year 1959 60 shows that machinery worth Rs. 17.62 lacs was discarded during that year.
Similarly tools and implements of the value of Rs. 8.57 lacs were also discarded.
To that extent deductions were made in the total value of fixed assets.
In showing depreciation of plant and machinery Rs. 10.91 lacs.
being the depreciation of these machines were also deducted from the total depreciation so far shown in the previous balance sheets.
The result was that the total depreciation including depreciation for machinery added during the year was brought down from Rs ' 48.37 lacs to Rs. 44.20 lacs.
The evidence of Desai shows that the machines ' Ledger maintained by the Company shows only the list of machines in actual operation , which means that the discar ded ones are 'not shown in that list.
The machinery discarded during this year was thus taken out from the fixed assets as if it did not exist.
The depreciation in respect of it was also deducted from the total depreciation and therefore no rehabilitation was in fact claimed for such machinery.
Mr. Ramamurti next urged that the Tribunal ought to have allowed only 30% of rehabilitation cost for old machinery as was done in South India Millowners ' Associations 's Case(1).
That case (1) [1962] Spp.
2 S.C.R. 926. 800 does not lay down any such rule.
30% only was allowed in that case as an ad hoc figure because the Association there had failed to produce materials showing the original price and subsequent depreciation and this Court refused to interfere with that figure as the Tribunal had no other alternative except to adopt an ad hoc basis.
The Court however made it clear that in the case of old machinery the cost price of such machinery must be ascertained and this can be done by enquiring for how much the machinery could be originally purchased when new.
There is therefore no warrant for saying that only 30% of the rehabilitation cost can be allowed in the case of old machinery.
We cannot also agree with Mr. Ramamurti 's contention that the Tribunal in calculating the rehabilitation requirement for the bonus years was wrong in taking only the notional normal depreciation and not the statutory depreciation including development rebate permissible under the Income tax Act.
In Associated Cement Co. 's Case(1) at p. 994, in the Chart prepared by this Court only.
the notional normal depreciation was deducted while the rehabilitation requirement.
It was when the Court calculated the Income tax payable by the Company that it deducted the statutory depreciation from the gross profits (see also Bengal Kagazkal Mazdoor Union & Ors.
vs Titagarh Paper Mills Co. Ltd. & Ors.(2) The last contention was that the Tribunal should not have rejected the bonus claim for 1956 57.
The balance sheet for the year 1956 57 was published in December 1957, the Company 's accounts were closed and appropriations of profits for that year were made latest by the end of 1957.
The claim for bonus was raised for the first time by the Union 's resolution of July 24, 1959, that is, more than 18 months after the closure of accounts.
The claim for 1956 57 was thus clearly belated and the Tribunal was right in refusing to compel the Company to reopen its accounts and to readjust appropriations made long before the demand was raised.
It has to be remembered that a claim, for bonus is not one for deferred wages.
Its recognition in industrial adjudication is based on the desirability of a balance of adjustments of the different interests concerned in the industrial structure of a country in order to promote harmony amongst them on an ethical and economic foundation.
Industrial adjudication therefore is bound to take into consideration delay and laches before it calls upon the other side to reopen its accounts closed long ago.
We do not think that the Tribunal was in any error in rejecting the claim on the ground of laches.
The principle that aches are fatal to such a claim has long been accepted in a series of decisions both by the Tribunals and by this Court.
(1) (2) [1963] II L.L.J. 358 801 Calculation of annual requirement for rehabilitation of old machinery 801(a) Period Cost Cost as Multi Total Less Balance shown by plier Break Co. in down exhibit M. Value 5% 1 2 3 4 5 6 7 1950 51 13.37 20.05 3.97 79.72 1.00 78.72 1953 54 1.24 1.86 7.85 11.57 0.0914.48 1954 55 1.95 2.93 3.50 10.25 0.15 10.10 1955 56 0.30 .45 2.47 1.11 0.02 1.09 1956 57 1.40 2.10 4.75 9.97 .11 9.96 1957 58 1.77 2.65 2.29 6.08 .13 5.95 801(b) Deductions Balance Divisor Annual Require ment 8 9 10 11 (i) 48.83 Depreciation 11.67 3 3.89 (ii)18.22 Available Resourcess 67.05 14.48 6 2.41 10.10 7 1.44 1.09 8 0.14 9.86 9 1.10 0.95 10 0.59 Total 9.57 802 (a) Period Cost cost as Multi Total Less Balance shown by plier Break Co.in down exhibit
M. value 5% 1 2 3 4 5 6 7 1950 51 16.30 16.30 3.36 54.77 0.81 53.96 1951 52 1.43 1.43 1.87 2.67 0.07 2.60 1952 53 2.18 2.18 1.47 3.21 0.11 3.10 1953 54 1.12 1.12 2.28 2.55 0.06 2.49 1954 55 3.71 3.71 1.96 6.90 0.19 6.71 1955.56 6.93 6.93 2.18 15.11 0.35 14.76 1956.57 13.11 13.11 2.35 30.80 0.66 30.14 1957 58 3.39 3.39 1 3.39 0.17 3.22 1958 59 12.95 12.95 1 12.95 0.65 12.30 1959 60 30.76 30.76 1 30.76 1.54 29.22 802(b) Deductions Balance Divisor Annual Require ment 8 9 10 11 53.96 8 6.75 2.60 9 0.29 3.10 10 0.31 2.49 11 0.23 6.71 12 0.56 14.76 13 1.14 30.14 14 2.15 3.22 15 0.21 12.30 15 0.82 29.22 15 1.95 802(c) TOTAL ANNUAL, REQUIREMENT FOR OLD) AND NEW MACHINERY Old New Total 1957 58. 9.57 11.64 21.21 1958 59. (additional) 0.82 22.03 1959 60. . (additional) 1.95 23.98 803(a) Years Machinery Building Total 1957 58 21.21 0.72 21.93 1958 59 22.03 0.77 22.80 1959 60 23.98 0.82 24.80 803(b) (Figures in lacs) National Normal Depre Balance to be provided ciation allowed during out of profits the year to be deducted 9.10 12.83 9.00 13.80 10.83 13.97 803(c) Detailed Calculations of available surplus for the three bonus years (Figures in lacs) 1957 58 1958 59 1959 60 Gross Profits 28.34 25.36 34.92 Less Notional Normlal Depreciation 9.10 9.00 10.83 19.24 16.36 24.09 Less Income tax 8.18 7.48 7.31 11.06 8.88 16.78 Less Wealth Tax 0.28 0.29 . 10.78 8.59 16.78 Less return on paid up capital 3.60 3.60 4.35 7.18 4.99 12.43 Less additional provision for rehabilitation for plant, machinery and buildings 12.8313 8013.97 vailable Surplus Nil Nil Nil 804 The, Chartst showing calculations of available surplus for the A three bonus years show that in all these years no surplus remains available for distribution of bonus after making provision for rehabilitation.
As a result, the appeal by the Company must be allowed and the direction made by the Tribunal for payment of bonus for these three years has to be set aside.
In the circumstances of this case, the parties will bear their own costs.
The appeal by the Union is dismissed.
There will be no order as to costs.
G.C. Appeal dismissed. | The workmen of the appellant company demanded bonus for the years 1956 57 to 1959 60.
The Tribunal disallowed the claim for 1956 57 on the ground that it was belated and allowed the demand for the rest of the years 1957 58 to 1959 60.
In working out the available surplus for distribution as bonus the Tribunal in general followed the Full Bench formula evolved by the Labour Appellate Tribunal.
Against the Tribunal 's award the company as well as the workmen appealed to the Supreme Court by special leave under article 136 of the Constitution.
Both sides raised contentions with regard to the rehabilitation allowances in respect of plant and machinery for the three years in question and the method followed by the Tribunal in calculating them.
The main question for decision arose out of the company 's contention that since it furnished quotations for all machinery including the old machinery, the Tribunal ought to have accepted those quotations as equivalent to replacement cost as it did in the case of new machinery instead of adopting the notional method of working out multipliers and then arriving at replacement cost by multiplying that multiplier with the estimated cost to the sellers.
HELD: (i) The multiplier is at best an approximation arrived at from the trend of price level during the ascertained intervening period.
But when the cost of replacement is ascertained from quotations of prices for the year of replacement such cost s more accurate than a notional one worked out from the multiplier.
It is therefore not always necessary to arrive at a multiplier for estimating the probable cost of replacement.
[789 C D].
In the present case since the Tribunal accepted the quotations ' and worked out the multiplier in the case of new machinery by dividing the quotations by the original cost it ought to have followed the same method in the case of old machinery as it had before it the cost of the old machinery as new and the cost of replacement, both unchallenged by the union.
If the rehabilitation cost was calculated in this manner there would be no available surplus with the company and hence no bonus would be payable. ' [787 H 788A; 787 A B].
(ii) It is well established that in the case of old machinery the employees cannot insist that such machinery should be replaced by old machinery.
For working out the rehabilitation cost of such.
machinery it ' is the cost of new machinery that is to replace the old which has to be taken into consideration.
[787 F G].
(iii).
Whenever it is possible to estimate itemwise the probable cost of machinery in the year of replacement such a method is not only permissible but is more desirable.
The blockwise estimate has.
780 to be resorted to when itemwise estimate is not possible as when the industry owns several factories and the number of plant and machinery is so large that it becomes difficult to make an estimate of replacement cost itemwise.
[789 B C; 788 G H].
(iv) The contention on behalf of the workmen that the replacement cost should be worked out on the basis of the price level during the bonus year could not be accepted.
The test is the probable cost of replacement when rehabilitation becomes due.
If the bonus year and the year of rehabilitation coincide, the price level during the bonus year would no doubt be the relevant basis.
But when they do not coincide and the due year of rehabilitation is the year beyond the bonus year that which is relevant is the probable cost of replacement during that year.
[790 H; 791 A B].
(v) Ordinarily, the Tribunal has to satisfy itself that no cost of expansion is injected in the rehabilitation cost.
In the present case, however, it did not appear from the record that any question of expansion arose as the Union accepted the quotations as equivalent to the replacement cost, [791 F G].
(vi) The Tribunal was justified in taking the price rise in respect of the machinery installed in the bonus, years as zero.
Though the prices for such machinery in 1963 64 were available, considering that its life was 15 years, it was too early to find out with any precision the probable trend of prices during the intervening years.
[793 EG].
(vii) The Tribunal was wrong in giving a uniform remainder life of 7 years to old machinery irrespective of the year of its installation.
Taking the life of old machinery to be 10 years, the old machinery purchased in 1950 51 would require replacement in 1960 61 and so on.
In that case the remainder life in the bonus year 1957 58 of old machinery installed in 1950 51 would clearly be 3 years, of old machinery installed in 1955 56 8 years, of machinery installed in 1956 57 9 years and that installed in 1957 58 10 years.
The divisor therefore could not be the uniform 7 for all the three years but a graduated one on the basis that the estimated life of the old machinery was 10 years.
[793 H; 794 B.] (viii) The Tribunal was justified, in view of the decision of this Court in the South India Millowners ' Association 's case, in taking the whole cost of the old machinery as depreciation, but it made a mistake in deducting it twice over.
[795 B C].
(ix) The company not being an investment company, its investments in shares of other joint state companies prima facie represented extra capital not required as working ' capital, for otherwise the company could not have spared this amount for investment in the stocks of other companies.
The Tribunal was right in treating this Investment as a capital asset and in refusing to treat the loss therefrom as trading expenditure.
The Tribunal at the same time could deduct this amount from the rehabilitation cost because that amount was avilable to meet the rehabilitation cost.
[797 H; 798 A].
(x) Though the Full Bench formula provided for payment of net interest at 6 per cent annum on paid up capital.
that rate is not to be regarded as something inflexible.
While awarding interest if 781 the Tribunal were to find that if it were to grant 6 per cent interest on paid up capital.
nothing or no appreciable amount would be left for bonus, it can adjust the rate of interest so as to accommodate reasonably the claim for bonus and thus must meet the demands of both as reasonably as possible.
[798 G; 799 B].
(xi) In fixing the life of machinery the principle that the Tribunal has to bear in mind is that the life of machinery is the period during which it is estimated to work with reasonable efficiency and not the period during which it has actually been operated, that is, till it becomes too deteriorated for use.
In the present case the Tribunal fixed the period of 15 years after considering the evidence and the nature of the industry.
There was no reason why its determination should be interfered with.
[799 G H].
(xii) The Tribunal was right in not excluding the cost of spares from the price of machinery for the purpose of calculating rehabilitation cost.
In the case of imported machinery spares are generally included in the purchase and their cost must be included in the purchase price, the reason being that in case of breakdown the company would not have to wait for an indefinite period for ordering and obtaining the spares.
[800 B].
(xiii) The statutory depreciation and development rebate allowable under the Income tax Act are not relevant for the purpose of calculating rehabilitation requirement.
Only the notional normal depreciation need be deducted.
[801 C D].
(xiv) The claim for bonus in respect of 1956 57 was made more than 18 months after the closure of accounts.
Industrial adjudication.
;Is bound to take into consideration delay and laches before it calls, upon the other side to reopen its accounts closed long ago.
The Tribunal was therefore right in rejecting the claim on the ground of laches.
[801 F G].
Millowners ' Association.
Bombay vs Rashtriya Mill Mazdoor, Sangh, Bombay , Associated Cement Co: Ltd. vs Its Workmen , Management of Rajendra Mills Ltd. vs Their Workmen , The Workmen vs The National Tobacco Co. , South India Millowners ' Association & Ors.
vs Coimbatore District Textile Workers ' Union and Others [1962] 1 L.L.L. 223, G. F. Mills vs Its Workmen., A.I.R. 1958 S.C. 382.
South India Millowners ' Association and Ors.
vs Coimbatore District Textile Workers ' Union and Or,,;.,, [1962] Supp. 2 S.C.R. 926, Pierce Leslie & Co. vs Its Workmen, ; and Bengai.
Kagazkar Mazdoor Union & Ors.
vs Titagarh Paper Mills Co. and Ors. , referred to; |
N: Criminal Appeal No. 379 of 1986.
From the Judgment and Order dated 13.7.1984 of the Punjab and Haryana High Court in Crl.
Appeal No. 82 D.B. of 1984.
R.L. Kohli and R.C. Kohli for the Appellant.
412 R.S. Suri for the Respondent.
The Judgment of the Court was delivered by JAGANNATHA SHETTY, J.
One may ask the question whether murder by poisoning is not run like any other murder? The learned counsel for the appellant purports to state that it is not.
He relies upon the judicial prescriptions as to the burden of proof in "poison murder" cases.
He contends that the prosecution must prove "that the accused had the poison in his possession".
He asserts that failure to establish that factor should entail the acquittal of the accused.
This is a vital question which goes far beyond the case and it, therefore, requires careful consideration.
Bhupinder Singh Appellant was prosecuted for the murder of his wife by poisoning.
He was sentenced for life imprisonment by the Additional Sessions Judge, Faridkot in Session Case No. 86 of 1983.
His conviction and sentence have been affirmed by the Punjab and Haryana High Court in criminal appeal No. 82 DB of 1984.
He has preferred this appeal by special leave challenging the conviction and sentence.
We may first advert to the prosecution case.
It reveals a sad story.
It runs like this: Gian Kaur, the victim in this case is the only daughter of Baltej Singh.
Baltej Singh like many other parents thought that his problems would be solved by the marriage of his daughter.
He got her married to Bhupinder Singh by spending all his savings.
His relatives also contributed for the marriage.
But ill luck would have it, his problems started immediately after the marriage.
Bhupinder Singh and his parents wanted Gian Kaur to bring Rs. 10,000 from her father.
It was nothing but a demand for dowry.
They stopped up their demand with harassment to Gian Kaur.
Gian Kaur informed her father.
The father could not arrange that much of amount.
He had already spent all that he had in connection with her marriage.
He had also then given presents in cash and kind to Bhupinder Singh.
So he felt helpless.
Unmerciful, Bhupinder Singh asked his wife to go back to her parents ' house.
So she left to seek shelter with her parents.
She remained with them for about eight months.
But how long the father could keep his married daughter away from her husband.
Some parents think that it is a reflection upon them.
Baltej Singh also must have thought like that.
He somehow arranged Rs.6,000 and sent Gian Kaur to her husband 's house.
Gian Kaur rejoined her husband upon making the payment of Rs.6,000.
That appears to have satisfied Bhupinder Singh for about 413 one year.
In the meantime, Gian Kaur had a male child.
Naturally there was jubilation for Baltej Singh.
He performed the customary Chuchhak ceremony and again gave Rs.4,000 and a buffalo as presents to Bhupinder Singh.
Bhupinder Singh ought to have been happy and satisfied.
But he was not.
It was alleged by the prosecution that this time he demanded a motorcycle.
Baltej Singh could not give it.
Gian Kaur, as usual, was again the target.
It was further alleged by the prosecution that Bhupinder Singh threatened to kill his wife if motorcycle was not given to him.
Gian Kaur had kept her father informed about the said demand and the threat.
On July 13, 1983, Gian Kaur died under mysterious circumstances.
Upon receiving that information, Baltej Singh with his brother Baldev Singh reached the place in the evening of that day.
They saw Gian Kaur, lying dead on a charpai.
They suspected foul play.
Baltej Singh gave the information to the police narrating all the above events.
He informed the police that his daughter was killed by Bhupinder Singh and his parents by administering something to her.
On the basis of that information, the F.I.R. was issued.
The investigation of the case was taken by A.S.I. (PW 4).
The body of Gian Kaur was sent to Dr. Sant Prakash Singh (PW 6) for post mortem.
The Doctor Prakash Singh noticed five minor injuries on the body of the deceased.
The brain and other vital organs were also found to be congested.
The Doctor sent stomach contents, portions of small intestine, liver, spleen and kidney to the chemical examiner for the purpose of analysis.
The chemical examiner in his report dated September 14, 1983 has stated that an Organo phosphorus compound was found in the substance sent to him for analysis.
The investigating officer sent that report for opinion of the Doctor Prakash Singh as to the cause of death of Gian Kaur.
The Doctor gave his opinion that the death of Gian Kaur was due to organo phosphorus compound poisoning.
Bhupinder Singh, his father Sher Singh and his mother Mukhtiar Kaur were tried for committing the murder of Gian kaur by administering poison.
The prosecution examined six witnesses and the accused in turn examined one.
The trial court after considering the evidence and other material on record held as follows: The accused had strong motive to get rid of Gian Kaur.
Apparently motive for the murder was the inability of Gian Kaur 414 to satisfy the demand for dowry.
The death of Gian Kaur was not accidental or suicidal.
There was no reason for her to commit suicide.
It was also not a death by food poisoning since the accused and deceased shared common food on the fateful night.
There was none else in the house on that night except Gian Kaur and the accused.
The accused had an opportunity to accomplish their design.
The accused must have administered the poison to the victim.
The injuries found on the body of the deceased indicated the resistence she must have offered when the poison was administered to her.
With these and other conclusions, the trial court finally said: "In the background of the circumstances and evidence discussed above, the only conclusion possible is that Bhupinder Singh and Mukhtiar Kaur did administer poison organo phosphorus compound to Gian Kaur and did cause her death with common intention, which was to get rid of her as she had not been able to persuade his father to meet their demand for motorcycle so as to clear way for another marriage of Bhupinder Singh in his youthful years in order to get more and more of dowry." Accordingly, the trial court found all the three accused guilty of the offence under Section 302 read with Section 34 I.P.C. They were sentenced to imprisonment for life.
Challenging the legality of the conviction and sentence the accused appealed to the High Court.
It was urged before the High Court that the death of Gian Kaur was not homicidal.
She must have in all probability committed suicide since she was suffering from tuberculosis.
It was also urged that the prosecution has failed to establish by evidence the necessary conditions for the proof of murder by poisoning.
The High Court did not agree with those contentions.
The High Court ruled out the theory of suicide.
It was observed that there was no evidence to show that Gian Kaur was suffering from tuberculosis or ever treated for that disease.
The High Court observed: "Case of murder by poisoning is always one of secrecy.
Almost in every such case one has to depend on circumstances.
Doubtless, before a person can be convicted on the strength of circumstantial evidence, the circumstances in question must be satisfactorily established 415 and the proved circumstances must bring home the offence to the accused beyond reasonable doubt.
If those circumstances or some of them can be explained by any reasonable hypothesis then the accused must have the benefit of that hypothesis.
But in assessing the evidence imaginary possibility has no place.
What has to be considered are ordinary human probabilities.
We have already referred to some important circumstances which in our opinion point out to the guilt of Bhupinder Singh and Sher Singh appellants.
In the well known case of Anant Chantman Lagu vs The State of Bombay, ; their Lordships held that in a cause of poisoning, the prosecution must establish: (a) that the death took place by poisoning; (b) that the accused had the poison in his possession; and (c) that the accused had an opportunity to administer the poison to the deceased.
All the three requirements are satisfied in this case.
There is no dispute that the death of the deceased was caused by poisoning.
It has been established by the chemical examiner 's report, that the viscera contained organo phosphorus compound poison.
The evidence of the prosecution witnesses has established that the aforesaid two appellants had the opportunity to administer poison to the deceased and that they had the motive to commit the crime.
Their running away from the house at the time when the Investigating Officer visited their house is also consistent with their guilt and not with their innocence.
" With these observations, the High Court confirmed the conviction and sentence on Sher Singh and Bhupinder Singh while acquitting Mukhtiar Kaur.
The present appeal is only by Bhupinder Singh.
Before embarking on the validity of the main submission made in this appeal, we may first dispose of one other contention urged for the appellant.
Mr. R.N. Kohli, learned counsel for the appellant submitted that it is not enough for the chemical examiner merely to state in his report that the organo phosphorus compound was present in the substance sent to him for examination.
He should have also stated that a lethal dose of the organo phosphorus compound was detected in the substance sent to him.
His report should be full and complete to take the place of evidence which he would have given if he were called to Court as witness.
In the absence of such particulars, the death by 416 poisoning cannot be inferred.
In support of this contention, learned counsel relied upon two decisions of the Allahabad High Court viz. (i) Mt. Gajrani and Anr.
vs Emperor, [A.I.R. 1933 Allahabad 394] and (ii) State vs Fateh Bahadur & Ors., [A.I.R. 1958, Allahabad 1].
In the first case, it was observed that it was not enough for the chemical examiner merely to state his opinion.
He must also state the grounds which formed the basis of his opinion.
The second case was a case of death by arsenic poisoning.
The chemical examiner did not state the quantity of arsenic poison found in the viscera of the deceased.
He did not state whether it was a fatal dose or not.
The High Court pointed out that it would be of the utmost importance before a Court could find any individual guilty of murder by arsenic poison that its complete analysis should be made.
It is not enough to state that arsenic was detected in the body of the deceased.
In our opinion, these observations cannot be taken as a rigid statement of law.
(No hard and fast rule can be laid down as regards the value to be attached to the report of the chemical examiner.
Section 293 of the Code of Criminal Procedure provides that the report ofscientific experts may be used as evidence in any inquiry, trial or other proceedings of the court.
The chemical examiner does not, as a rule, give an opinion as to the cause of death but merely gives report of the chemical examination of the substance sent to him.
The report by itself is not crucial.
It is a piece of evidence.
The only protection to it is that it does not require any formal proof.
It is, however, open to the Court if it thinks fit to call the chemical examiner and examine him as to the subject matter of the report.
The report should normally be forwarded to the Doctor who conducted the autopsy.
In the instant case, that was done.
The Doctor who conducted the autopsy was given a copy of the report of the chemical examiner.
The Doctor in the light of the report gave his opinion that the death of Gian Kaur was by poisoning i.e. organo phosphorus compound.
The report of the chemical examiner coupled with the opinion of the Doctor is, therefore, sufficient to hold that it was a death by poisoning.
This takes us to the main contention urged for the appellant.
It was urged that in a case of murder by poison there are three main points to be proved, firstly did the deceased die of the poison in question; secondly, had the accused got the poison in question in his or her possession; and thirdly, had the accused an opportunity to administer the poison in question to the deceased.
It was also urged that if the prosecution fails to prove these factors, then the accused cannot be convicted.
The evidence in the case, according to learned counsel falls 417 short of these requirements and, in particular, as to the question of proof of possession of the poison with the accused and therefore the accused is entitled to acquittal.
We have been referred to some decisions of this Court in support of the contention urged.
We have also examined some other cases bearing on the question raised.
A brief survey of these cases would be useful to appreciate the contention urged for the appellant.
There are two unreported decisions of this Court of the year 1958.
The first one is in Chandra Kant Myalchand Seth 's case [Criminal Appeal No. 120 of 1957 decided on 19.2.1958].
There a woman died of alkali cyanide.
The husband of the deceased was tried and convicted by the trial court for the offence of murder.
The conviction was set aside by this Court.
In the course of the judgment, it was observed: "Before a person can be convicted of murder by poisoning, it is necessary to prove that the death of the deceased was caused by poison, that the poison in question was in possession of the accused and that poison was administered by the accused to the deceased." The acquittal, however, was based on the consideration of the entire facts and circumstances of the case.
It was found that there was a greater motive to the deceased to commit suicide than to the accused to commit murder.
This Court also took note of the concern and conduct of the accused when he found his wife lying unconscious.
The accused ran to the house of his friend and returned with a Doctor to render assistance to the victim.
The accused called another Doctor for the same purpose.
He was also found weeping all the while.
Taking into consideration of all these factors, this Court found no justification to sustain the conviction of the accused.
Dharambir Singh vs State of Punjab, (Criminal Appeal No. 98 of 1958 decided on 4.11.1958) is another case of homicidal action by cyanide poisoning.
It was perhaps in this case, the guidelines as to the proof of certain facts in "poison murder cases" were laid down by this Court.
It was observed: "Where the evidence is circumstantial the fact that the accused had motive to cause death of the deceased, though relevant, is not enough to dispense with the proof of certain facts which are essential to be proved in such cases, namely (firstly) did the deceased die of poison in 418 question? (secondly) had the accused the poison in his possession? and (thirdly) had the accused an opportunity to administer the poison in question to the deceased? It is only when the motive is there and these facts are all proved that the court may be able to draw the inference, that the poison was administered by the accused to the deceased resulting in his death.
" After laying down these principles, the court considered the entire evidence on record which indicated the likelihood of the deceased committing suicide or another person to have administered the poison to the deceased.
This Court accordingly acquitted the accused by extending the benefit of doubt.
If one prefers to go yet further back we find a decision of the Allahabad High Court which is exactly on the principles laid down in Dharambir Singh case.
In Mt. Gajrani vs Emperor, A.I.R. 1933 All.
394 Benett, J. speaking for the Court observed (at p. 394): "In a case of murder by poison there are three main points to be proved: firstly, did the deceased die of the poison in question; secondly, had the accused got the poison in question in his or her possession; and thirdly, had the accused an opportunity to administer the poison in question to the deceased.
If these three points are proved, a presumption may under certain circumstances be drawn by the Court that the accused did administer poison to the deceased and did cause the death of the deceased.
It is not usual that reliable direct evidence is available to prove that the accused did actually administer poison to the deceased.
The evidence of motive which is frequently given in these cases is of subsidiary importance, and the mere fact that the accused had a motive to cause the death of the deceased is not a fact which will dispense with the proof of the second and third points that the accused had the poison in his or her possession, and that the accused had an opportunity to administer the poison.
" The above proposition found its way into Mohan vs State of Uttar Pradesh, ; and Ram Gopal vs State of Maharashtra, A.I.R. 1972 S.C. 656.
In Mohan 's case, the death in question was by arsenic poisoning.
In that case, the prosecution was able to prove that the accused gave 'peras ' to the victim as 'pershad ' and the victim 419 died after eating the 'pershad '. 'Pershad ' contained arsenic.
There was thus direct evidence as to the possession of the poison with the accused.
This Court, therefore, had no difficulty to sustain the conviction and sentence awarded to the accused.
Ram Gopal 's case was concerned with homicidal action by administering a compound called "kerosene and orango choloro compound".
The High Court, relying upon the motive and other circumstantial evidence convicted the accused for the offence of murder although there was no evidence that the accused was in possession of poison.
This Court could not agree with the view taken by the High Court.
The analysis of the evidence produced by the prosecution revealed that the motive alleged against the accused was not fully established.
The incriminating circumstantial evidence against the accused was also found to be insufficient.
So the conviction of the accused was set aside and the acquittal was recorded.
Sharda E. Chand Sarda vs State of Maharashtra, ; is yet another case of death by cyanide poisoning for which the husband of the deceased was tried for murder.
There was no direct evidence to establish that the accused was in possession of that poison.
The High Court, however, relied upon the circumstantial evidence and convicted the accused.
In the appeal preferred by the accused, this Court did not agree with the reasoning of the High Court.
After referring to Ram Gopal 's case.
Fazal Ali, J., focussed the attention on the following four factors: The learned Judge observed (at p.167): "So far as this matter is concerned, in such cases the court must carefully scan the evidence and determine the four important circumstances which alone can justify a conviction: (1) there is a clear motive for an accused to administer poison to the deceased, (2) that the deceased died of poison said to have been administered, (3) that the accused had the poison in his possession, (4) that he had an opportunity to administer the poison to the deceased.
" 420 The learned Judge went on to state: "In the instant case, while two ingredients have been proved but two have not.
In the first place, it has no doubt been proved that Manju died of potassium cyanide and secondly, it has also been proved that there was an opportunity to administer the poison.
It has, however, not been proved by any evidence that the appellant had the poison in his possession.
On the other hand, as indicated above, there is clear evidence of PW 2 that potassium cyanide could have been available to Manju from the plastic factory of her mother, but there is no evidence to show that the accused could have procured potassium cyanide from any available source.
We might here extract a most unintelligible and extra ordinary finding of the High Court: "It is true that there is no direct evidence on these two points, because the prosecution is not able to lead evidence that the accused had secured potassium cyanide poison from a particular source.
Similarly there is no direct evidence to prove that he had administered poison to Manju.
However, it is not necessary to prove each and every fact by a direct evidence.
Circumstantial evidence can be a basis for proving this fact.
" The comment by the high Court appears to be frightfully vague and absolutely unintelligible.
While holding in the clearest possible terms that there is no evidence in this case to show that the appellant was in possession of poison, the High Court observes that this fact may prove either by direct or indirect (circumstantial) evidence.
But it fails to indicate the nature of the circumstantial or indirect evidence to show that the appellant was in possession of poison.
If the Court seems to suggest that merely because the appellant had the opportunity to administer poison had the same was found in the body of the deceased, it should be presumed that the appellant was in possession of poison, then it has committed a serious and gross error of law and has blatantly violated the principles laid down by this Court.
The High Court has not indicated as to what was the basis for coming to a finding that the accused could have procured the cyanide.
On the other hand, in view of the 421 decision in Ram Gopal 's case failure to prove possession of the cyanide poison with the accused by itself would result in failure of the prosecution to prove its case." This Court then went into the merits of the prosecution case.
It was observed that the deceased was of sensitive mind.
She had occasionally suffered mental depression due to her inability to adjust herself to her husband 's family.
It was also observed that the deceased had access to the poison in question.
She could have secured the poison from the factory of her mother.
Considering these and other circumstances, it was held "that it might be a case of suicide or murder and both were equally probable".
So the accused was given the benefit of doubt and he was acquitted.
From the foregoing cases, it will be seen that in poison murder cases, the accused was not acquitted solely on the failure of the prosecution to establish one or the other requirement which this Court has laid down in Dharambir Singh case.
We do not also find any case where the accused was acquitted solely on the ground that the prosecution has failed to prove that the accused had the poison in his possession.
The accused in all the said cases came to be acquitted by taking into consideration the totality of the circumstances including insufficient motive, weakness in the chain of circumstantial evidence and likelihood of the deceased committing suicide.
We do not consider that there should be acquittal on the failure of the prosecution to prove the possession of poison with the accused.
Murder by poison is invariably committed under the cover and cloak of secrecy.
Nobody will administer poison to another in the presence of others.
The person who administers poison to another in secrecy will not keep a portion of it for the investigating officer to come and collect it.
The person who commits such murder would naturally take care to eliminate and destroy the evidence against him.
In such cases, it would be impossible for the prosecution to prove possession of poison with the accused.
The prosecution may, however, establish other circumstances consistent only with the hypothesis of the guilt of the accused.
The court then would not be justified in acquitting the accused on the ground that the prosecution has failed to prove possession of the poison with the accused.
The poison murder cases are not to be put outside the rule of circumstantial evidence.
There may be obvious very many facts and circumstances out of which the Court may be justified in drawing 422 permissible inference that the accused was in possession of the poison in question.
There may be very many facts and circumstances proved against the accused which may call for tacit assumption of the factum of possession of poison with the accused.
The insistence on proof of possession of poison with the accused invariably in every case is neither desirable nor practicable.
It would mean to introduce an extraneous ingredient to the offence of murder by poisoning.
We cannot, therefore, accept the contention urged by the learned counsel for the appellant.
The accused in a case of murder by poisoning cannot have a better chance of being exempted from sanctions than in other kinds of murders.
Murder by poisoning is run like any other murder.
In cases where dependence is wholly on circumstantial evidence, and direct evidence not being available, the Court can legitimately draw from the circumstances an inference on any matter one way or the other.
The view that we have taken gets support from the decision of this Court in Ananth Chintaman Laguy vs The State of Bombay, ; where Hidayatullah, J., has given an anxious consideration to the three propositions laid down in Dharambir Singh case.
The learned Judge did not consider them as invariable criteria of proof to be established by the prosecution in every case of murder by poisoning.
The learned Judge said (at p. 519 520): "It is now necessary to consider the arguments which have been advanced on behalf of the appellant.
The first contention is that the essential ingredients required to be proved in all cases of murder by poisoning were not proved by the prosecution in this case.
Reference in this connection is made to a decision of the Allahabad High Court in Mt. Gajrani vs Emperor.
AIR 1933 All 394 and to two unreported decisions of this Court in Chandrakant N Nyalchand Seth vs The State of Bombay, Criminal Appeal No. 120 of 1957 decided on February 19, 1958 and Dharambir Singh vs The State of Punjab, Criminal Appeal No. 98 of 1958, decided on 4.11.1958.
In these cases, the Court referred to three propositions which the prosecution must establish in a case of poisoning; (a) that death took place by poisoning; (b) that the accused had the poison in his possession, and (c) that the accused had an opportunity to administer the poison to the deceased.
The case in Cr. A. No. 98 of 1958 D/ 4.11.1958 (SC) turned upon these three propositions.
There, the deceased had died as a result of poisoning by potassium cyanide, which poison was also found in the 423 autopsy.
The High Court had disbelieved the evidence which sought to establish that the accused had obtained potassium cyanide, but held, nevertheless that the circumstantial evidence was sufficient to convict the accused in that case.
This Court, did not, however, accept the circumstantial evidence as complete.
It is to be observed that the three propositions were laid down not as the invariable criteria of proof by direct evidence in a case of murder by poisoning, because evidently if after poisoning the victim.
the accused destroyed all traces of the body, the first proposition would be incapable of being proved except by circumstantial evidence.
Similarly, if the accused gave a victim something to eat and the victim died immediately on the ingestion of that food with symptoms of poisoning and poison, in fact, was found in the viscera, the requirement of proving that the accused was possessed of the poison would follow from the circumstances that the accused gave the victim something to eat and need not be separately proved.
" The learned Judge continued: "The cases of this Court which were decided proceeded upon their own facts, and though the three propositions must be kept in mind always, the sufficiency of the evidence, direct or circumstantial? to establish murder by poisoning will depend on the facts of each case.
If the evidence in a particular case does not justify the inference that death is the result of poisoning because of the failure of the prosecution to prove the fact satisfactorily, either directly or by circumstantial evidence, then the benefit of the doubt will have to be given to the accused person.
But if circumstantial evidence, in the absence of direct proof of the three elements, is so decisive that the Court can unhesitatingly hold that the death was a result of administration of poison (though not detected) and that the poison must have been administered by the accused person, then the conviction can be rested on it." So much for the principles for which the learned counsel for the appellant fought for.
On the facts there is concurrence of opinion between the two courts below.
This Court seldom re examines the findings of fact reached by the High Court.
We may, however, out of 424 deference to the counsel briefly refer to the evidence.
The prosecution has established the motive for the murder.
The proof of motive goes a long way to tilt the scale against the accused which provides a foundational material to connect the chain of circumstances.
The facts which hear on motive are distressing.
After the marriage, Gian Kaur was subjected to repeated harassment for not satisfying the demand for dowry made by Bhupinder Singh.
Baltej Singh (PW2) has stated that Bhupinder Singh asked Gian Kaur to bring Rs. 10,000.
The parents of Bhupinder Singh were also parties to that demand.
Baltej Singh with all difficulties satisfied that demand in part by payment of Rs.6,000.
Bhupinder Singh thereafter demanded a motorcycle.
When that was not immediately given Bhupinder Singh held out a threat to his wife that she would be killed.
This was conveyed to Baltej Singh.
Before he could take a decision in this regard he was shocked to receive the news of death of Gian Kaur.
This has been proved by the testimony of Baltej Singh (PW 2) and Nazir Singh (PW 3).
The demand for dowry followed by harassment to the deceased has been thus satisfactorily proved.
The evidence of the Doctor and the report of the chemical examiner has established beyond doubt that Gian Kaur died of organo phosphorus compound poisoning.
Bhupinder Singh had an opportunity to administer that poison.
There was nobody else in the house.
All the inmates had their common food in the night.
All of them slept in the same place.
Both the Courts have ruled out the theory of suicide by Gian Kaur.
We entirely agree with that finding.
She could not have thrown her child to the mercy of others by committing suicide and indeed no mother would venture to do that.
The postmortem report giving the description of injuries found on the body of the deceased would also defy all doubts about the theory of suicide.
She had contusion on the front of right leg.
Abrasion on the front of the left leg just below the knee joint.
Linear abrasion on the back of the right hand.
Linear abrasion on the antro lateral aspect of left fore arm in its middle.
And contusion on the back of right elbow joint.
These injuries, as the Courts below have observed could have been caused while Gian Kaur resisted the poison being administered to her.
The behaviour of Bhupinder Singh in the early hours of that fateful day by going to his field as if nothing had happened to his wife is apparently inconsistent with the normal human behaviour.
There was no attempt made by him or other inmates of the house to look out for any Doctor to give medical attention to the victim.
The movement and disposition of Bhupinder Singh towards the victim and situations 425 are incompatible with his innocence.
On the contrary, it gives sustenance to his guilt.
The Courts below having considered all these facts and circumstances had no difficulty to convict the accused for murder and we see no good reason to interfere with that conclusion.
In the result, the appeal fails and is dismissed.
R.S.S. Appeal dismissed. | % Bhupinder Singh, appellant, his father Sher Singh and his mother Mukhtiar Kaur, were tried for committing the murder of Bhupinder Singh 's wife, Gian Kaur, by administering poison.
The Trial Court held that the accused had strong motive for the murder as the deceased was unable to satisfy their demand for dowry for which she was being constantly harassed.
The Trial Court further held that the death of Gian Kaur was not accidental or suicidal or by food poisoning.
The Trial Court held that the accused had the opportunity to accomplish their design, and they did administer poison which the deceased must have resisted and thereby suffered injuries on her body.
The Trial Court found all the three accused guilty of the offence under section 302 read with section 34 I.P.C. and sentenced them to imprisonment for life.
It was urged before the High Court that the prosecution has failed to establish by evidence the necessary conditions for the proof of murder by poisoning.
Disagreeing with the contentions and the theory of suicide put forth by the appellant, the High Court confirmed the conviction and sentence on Bhupinder Singh and Sher Singh while acquitting Mukhtiar Kaur.
The present appeal by special leave is only by Bhupinder Singh.
The main contention of the appellant is that in a case of murder by poison there are three main points to be proved; firstly, did the deceased die of the poison in question; secondly, had the accused got the 410 poison in question in his or her possession, and thirdly, had the accused an opportunity to administer the poison in question to the deceased.
It is contended that the evidence falls short of these requirements, and in particular, as to the question of proof of possession of the poison with the accused.
The second contention of the appellant is that it is not enough for the chemical examiner merely to state in his report that the poison Organo phosphorus compound was present in the substance sent for examination; he should have also stated that a lethal dose of the poison was detected.
It is submitted that his report should be full and complete to take the place of evidence which he would have given if he were called to Court as witness.
Dismissing the appeal, this Court, ^ HELD: (1) Section 293 of the Code of Criminal Procedure provides that the report of scientific experts may be used as evidence in any inquiry, trial or other proceedings of the Court.
[416D] (2) No hard and fast rule can be laid down as regards the value to be attached to the report of the chemical examiner.
[416D] (3) The chemical examiner does not, as a rule, give an opinion as to the cause of death but merely gives report of the chemical examination.
The report itself is not crucial.
It is a place of evidece.
The only protection to it is that it does not require any formal proof.
It is, however, open to the Court, if it thinks fit, to call the chemical examiner and examine him as to the subject matter of the report.
The report should normally be forwarded to the doctor who conducted the autopsy.
[416D F] (4) In poison murder cases, the accused are not acquitted solely on the failure of the prosecution to establish one or the other requirement.
They are not to be acquitted solely on the ground that the prosecution has failed to prove that the accused had the poison in his possession, and are to be acquitted by the Court taking into account the totality of the circumstances including insufficient motive, weakness in the chain of circumstantial evidence and likelihood of the deceased committing suicide.
[421C E] (5) Murder by poisoning is run like any other murder and the accused cannot have a better chance of being exempted from sanctions 411 than in other kinds of murders.
[422B C] (6) The poison murder cases are not to be put outside the rule of circumstantial evidence.
There may be obvious very many facts and circumstances out of which the Court may be justified in drawing permissible inference that the accused was in possession of the poison in question.
[421H; 422A] (7) The insistence on proof of possession of poison with the accused invariably in every case is neither desirable nor permissible.
It would mean to introduce an extraneous ingredient to the offence of murder by poisoning.
[422B] (8) Murder by poison is invariably committed under the cover and cloak of secrecy.
Nobody will administer poison to another in the presence of others.
The person who administers poison to another in secrecy will not keep a portion of it for the investigating officer to come and collect it.
The person who commits such murder would naturally take care to eliminate and destroy the evidence against him.
In such case, it would be impossible for the prosecution to prove possession of poison with the accused.
The prosecution may, however, establish other circumstances consistent only with the hypothesis of the guilt of the accused.
The Court then would not be justified in acquitting the accused on the ground that the prosecution has failed to prove possession of the poison with the accused.
[421E G] Mt. Gajrani and another vs Emperor, A.I.R. 1933 All 394; State vs Fateh Bahadur, A.I.R. 1958 All 1; Chandra Kant Myalchand Seth 's case, (Criminal Appeal No. 120 of 1957 decided on 19.2.1958): Dharambir Singh vs The State of Punjab, Criminal Appeal No. 98 of 1958 decided on 4.11.1958; Mohan vs State of Uttar Pradesh, ; ; Ram Gopal vs State of Maharashtra, A.I.R. 1972 S.C. 656; Sharda B. Chand Sarda vs State of Maharashtra, ; and Ananth Chintaman Lagu vs The State of Bombay, ; , referred to. |
Special Leave Petition (Civil) No. 6577 of 1988.
From the Judgment and order dated 27.4.1988 of the High Court of Allahabad in C.M.W. No. 3777 of 1987.
G.L. Sanghi and Manoj Prasad for the Petitioner.
PG NO 278 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This application for leave to appeal under Article 136 of the Constitution arises from the judgment and order of the High Court of Allahabad, dated 27th April, 1988 by the judgment under challenge the Division Bench by majority directed the Addl.
City Magistrate or the Officer at present exercising the power of Distt.
Magistrate under Rule 10(9) of the U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Rules 1972 to issue notice on all the five landlords mentioned in the petition within one week of the filing of the certified copy of the Order, and thereafter to make an Order in accordance with law and in the light of the observations made in the said Judgment.
The petitioner before the High Court, who is the petitioner herein also, was directed not to be dispossessed until disposal of the matter by the High Court.
This application is by the tenant petitioner.
The premises in question had five co owners, namely, Veeresh Saxena, R.C. Saxena.
D.C. Saxena, Smt.
Shanti Saxena and B.S. Saxena, respondent No. 3.
Until January, 1978, Veeresh Saxena was in sole and exclusive actual physical possession of the shop and carried on business in it.
In January, 1978 the present petitioner filed allotment application for the shop and he was the sole applicant.
On 28.1.1978, Veeresh Saxena vacated the shop and sent intimation of vacancy to the Rent Control Officer under the U.P. Urban Buildings (Regulation of Letting & Eviction) Act, 1972 (hereinafter called the Act).
The Rent Control Officer, then, directed him to appear in the allotment proceedings The Inspector reported that Veeresh Saxena was found to be in possession of the shop, discontinuing the business and was going to let out the shop.
On the Inspector 's report being pasted on the Notice Board of the Rent Controller Office, neither B.S. Saxena nor the other 3 co owners filed any objection.
Veeresh Saxena filed an affidavit before the Rent Control Officer that he wanted to let out the shop to the petitioner.
The 3 other co owners never objected to the petitioner`s tenancy on the allotment order throughout the last 10 years.
The allotment letter was accordingly passed on 12th February, 1978.
The possession was, thereafter, taken up, it was alleged by the petitioner in the special leave petition.
The petitioner had alleged that he had invested more than Rs.2 lakhs in the shop, but B.S. Saxena.
who was a non occupant owner, on or about 25th February, 1978 filed an application under section 16(5) of the Act, after 25 days of allotment, for review of the Order.
It was alleged by the petitioner that the evidence was overwhelmingly in support of the fact that he had taken PG NO 279 possession of the premises on or about 4/5th February, 1978.
The Rent Controller, however, on the said application of B.S. Saxena allowed the review application and cancelled the allotment order.
revision against the said order was filed before the learned Judge under section 18 of the Act.
The learned Addl.
Distt.
Judge dismissed the revision.
The petitioner, thereafter, filed a writ petition in the High Court of Allahabad .
The question arose about the maintainability of the review application under section 16(5) of the Act.
It is upon this point that the matter has been agitated before us.
There was a difference of opinion about the maintainability of the review application at the instance of a non occupant owner and the matter was referred to a Bench of 3 learned Judges and by majority the Division Bench came to the conclusion that such an application was maintainable.
The petitioner herein contends that the High Court was wrong in the view it took on the construction of Section 16(5)(b) of the Act.
The relevant provisions of the said sub section read as follow: "(5)(a) Where the landlord or any other person claiming to be lawful occupant of the building or any part thereof comprised in the allotment or release order satisfies the District Magistrate that such order was not made in accordance with clause (a) or clause (b) as the case may be of sub section (I), the District Magistrate may review the order: Provided 1hat no application under this clause shall be entertained later than seven days after the eviction of such person .
(b) Where the District Magistrate on review under this sub section sets aside or modifies his order of allotment or release, he shall put or cause to be put the applicant, if already evicted, back into possession of the building, and may for that purpose use or cause to be used such force as may be necessary.
(6) x x x (7) Every order under this section shall subJect to any order made under sec.
18 be final.
" PG NO 280 The contention is that a landlord who was not in actual physical possession until making of the allotment order or is evicted in pursuant thereof, is not competent to make an application for review of the allotment order or release order under section 16(5)(a) & (b) of the Act.
Admittedly, as mentioned hereinbefore, the respondent applicant was not in occupation when the Order was made.
He was, however, indisputably a landlord.
So, the question is whether on the construction of the section, a landlord who Is not in actual physical possession at the time of the release order, is entitled under the law to apply for review of the order.
The High Court held that he is entitled.
We are of the opinion that the High Court was right.
Section 16(5)(a) speaks of 'where the landlord or any other person '.
Hence,there are two categories of persons contemplated i.e. a landlord, or any other person.
The requirement of sub section, to be in lawful occupation of the building or any part thereof, applies Only in case of Lany other person claiming to be in lawful occupation and not in case of landlord.
The Section has used the expression ' or" and so the expression or is disjunctive of these two categories to be treated separately.
Hence, the requirement to be in lawful occupation.
is not there in case of an application by the landlord.
Mr. G.L. Sanghi, learned counsel appearing for the tenant, has sought to argue that by virtue of the proviso a landlord who was not in occupation, was not entitled to apply.
We are unable to accept this.
The proviso puts an embargo of 7 days in making the application for review.
It can only apply to those who were in lawful occuaption at the time of the making of the original Order.
It cannot curtail the rights of the landlord, as such, it only affects any other person who was lawful occupation.
In any event, it is a well settled principle of construction that unless clearly indicated, a proviso would not away substantive rights given by the Section or the sub section.
A land lord has a right to the property.
The Section should not be construed as to defeat the right to possession of property in appropriate cases unless the intention of the Legislature is manifest We find no such clear intention in the facts of this case.
We are, therefore,.
of the opinion that the High Court came to the correct conclusion that a landlord, even though not in actual physical possession at the time of the possession of the property.
call ask for review of the order of release or allotment.
It must be borne in mind that this view was also expressed by Mr. Justice N.D.Ojha, as our learned brother then was, in his judgment in Niren Kumar Das vs The District Judge, Pilibhit & Ors., AIR 1977 Allahabad PG NO 281 47.
We agree with that interpretation.
In that view of the matter, there is no substance in the contentions urged in the specil leave petition.
The application is, therefore,rejected.
N.V.K. Petition dismissed. | The petitioner in the Special Leave Petition is the tenant, Respondent No. 3 was one of the five co owners of the petition premises.
On January 28, 1978, one of the co owners who had sole possession of the shop vacated the shop and sent intimation of the vacancy to the Rent Controller under the U.P. Urban Buildings (Regulation of Letting and Eviction) Act, 1972.
The petitioner filed allotment application for the said shop and he was the sole applicant.
The Rent Control Officer directed the petitioner to appear in the allotment proceedings, called for a report from the Inspector, found one of the co owners to he in possession of the shop and that he had discontinued the business and was going to let out the shop.
The 3 other co owners never objected to the petitioner 's tenancy on the allotment order.
The allotment letter was accordingly passed on 12th February.1978, and possession was taken up by the petitioner thereafter.
On or about 25th February, 1978 the 3rd respondent who was a non occupant owner filed an application under section 16(5) of the Act i.e. after 25 days of the allotment, for review of the order.
The Rent Controller allowed the review application and cancelled the allotment order.
The Additional District Judge having dismissed the revision petition, the petitioner filed a writ petition in the High Court.
The question about the maintainability of the review application under section 16(5) of the Act at the instance PG NO 276 PG NO 277 of a non occupant owner having arisen the matter was referred to a Full Bench and by a majority, the Bench came to the conclusion that such an application was maintainable.
Dismissing the Special Leave Petition, HELD: 1.
A landlord, even though not in actual possession at the time of the possession of the property, can ask for review of the order of release or allotment.
[280G] 2.
A landlord has a right to the property.
The section should not be so construed as to defeat the right to possession of property in appropriate cases unless the intention of the Legislature is manifest.
[280F] 3.
Section 16(5)(a) speaks of 'where the landlord or any other person '.
Hence, two categories of persons are contemplated i.e. a land lord, or any other person.
[280C] 4.
The requirement of the sub section, to be in lawful occupation of the building or any part thereof, applies only in case of any other person claiming to be in lawful occupation and not in case of landlord.
The Section has used the expression "or" and so the expression "or" is disjunctive of these two categories to be treated separately.
Hence, the requirement to be in lawful occupation, is not there is case of an application by the landlord.
[280C D] 5.
The proviso puts an embargo of 7 days in making the application for review.
It can only apply to those who were in lawful occupation at the time of the making of the original Order.
It cannot curtail the rights of the landlord.
as such, it only affects any other person who was in lawful occupation.
[280E G] Niren Kumar Das vs 7he District Judge, Pilibhit & Ors.
AIR 1977 Allahabad 47, approved. |
Appeals Nos. 165 and 166 01 1965.
Appeals from the judgment and decree dated May 7, 1960 of the Madras High Court in O.S.A. Nos. 25 and 52 of 1956.
S.V. Gupte, Naunit Lal and R. Thiagarajan, for the appellants (in both the appeals).
N.C. Chatterjee, section Balakrishnan for R. Ganapathy lyer, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Bachawat, J.
The dispute arises out of a contract between the appellants and the respondent entered into on November 13, 1951.
The terms of this contract were recorded in writing in the form of a letter written by the respondent to appellant No. 1 and set out below: "Messrs. P.S.N.S. Ambalavana Chettiar and Company Ltd., 260, Angappa Naicken Street, Madras.
Dear Sirs, We confirm having purchased from you and the Madras Paper Marketing Company, Madras, 500 tons of Russian Newsprint as per the following description : About.70 per cent in reels of 34 inches width. " 15 per cent in reels of 22 inches width.
" 15 per cent in reels of 36 inches width.
at annas 9 per lb.
Ex Wharf Bombay duty, etc., paid.
The buyers are to take delivery within four days of the offer of delivery.
Any wharfage, etc., up to the fourth day of the offer of delivery will be on seller 's account and thereafter on buyer 's account.
We have also sold you about 415 tons of Russian newsprint in sheets in size of about 30"X 42" (760 mm X 1085 mm) ex godown, Madras at Re. 0 9 6 per lb.
We will keep the stock of sheets in our godown on your account free of rent.
We shall advance you moneys against this newsprint at annas 8 per lb.
This advance will carry interest at 5 per cent per annum.
We will also charge you the exact amount of insurance which we pay to our Insurance Company against the goods.
241 We shall pay Rs. 5,60,000 to your Bankers in Bombay and take delivery of the 500 tons of newsprint from the harbour in Bombay.
Accounts wilt be made on the basis of the above arrangement and whatever one party is liable to pay to the other will be adjusted subsequently.
Thanking you, Yours faithfully, For Express Newspapers Limited Director.
" The document shows that the respondent agreed to buy from the appellants 500 tons of Russian newsprint in reels at 9 annas per lb., ex wharf Bombay, and to take delivery of the goods on payment of Rs. 5,60,000.
At the same time, the appellants agreed to buy from the respondent 415 tons of Russian newsprint in sheets then lying in a godown in Madras at 9 annas 6 pies per lb.
upon the term that the appellants would pay the insurance charge and also interest at 5 per cent per annum on an amount equivalent to the price of the goods calculated at 8 annas per lb.
The understanding was that the appellants would within a reasonable time take delivery of the goods bought by them in instalments and the accounts would be finally adjusted on the completion the deliveries.
It may be mentioned that appellant No. 2 carried on business under the name and style of Madras Paper Marketing Company.
On November 26, 1951, the parties orally agreed that instead of 500 tons the respondent would buy 300 tons of newsprint in reels and that instead of 415 'tons the appellants would buy 300 tons of newsprint in sheets and the terms of the contract dated November 13, 1951 would stand varied accordingly.
On December 5, 1951, the respondent took delivery of 300 tons of newsprint in reels on payment of Rs. 3,18,706 9 10 and a sum of Rs. 57,816 13 2 remained due to the appellants on account of the price of these goods.
From November 29, 1951 up to February 27, 1952, the appellants took delivery of 122324 lbs.
of newsprint in sheets on payment of.
63,032 15 9 to the respondent.
Subsequently, the appellants refused to take 'delivery of the balance 547501 lbs.
of newsprint in sheets.
Counsel for the parties agreed before us that March 29, 1952 was the date when the appellants repudiated the contract.
On April 21, 1952 after giving notice to the appellants the respondent resold the balance goods to one G.R. Lala at 61/2 annas per lb.
On April 18, 1952, the appellants filed in the High Court of Madras C.S. No. 175 of 1952 claiming from the respondent 242 Rs. 57,816 13 2 on account of the balance price of 300 tons of newsprint in reels and interest thereon.
The respondent admitted the claim for the balance price.
On July 30, 1952, the respondent filed in the High Court of Madras C.S. No. 262 of 1952 claiming a decree for Rs. 62,266 13 2 on account of the balance price of 122324 lbs.
, the deficiency 'on resale of 547501 lbs.
of the newsprint in sheets, interest and insurance charges after setting off the sum of Rs. 57,816 13 2 due to the appellants.
The principal defence of the appellants was that the contract with regard to 415 tons of newsprint in sheets was cancelled in November, 1951 and that appellant No. 2 was not a party to this contract.
The appellants also denied the factum and validity of the resale.
The two suits were tried.
by Rajagopala Ayyangar, J. He dismissed C.S. No. 175 of 1952 and decreed C.S. No. 262 of 1952.
From these two decrees, the appellants filed two appeals in the High Court of Madras.
A Division Bench of the High Court dismissed the two appeals.
The present appeals have been filed on certificates granted by the High Court.
The two Courts concurrently found that (1 ) appellant No. was a party to the contract of purchase of 415 tons of newsprint in sheets, (2) on November 26, 1951 the parties orally agreed that instead of 415 tons the appellants would buy 300 tons of the newsprint and (3) there was no cancellation of the contract as alleged by the appellants.
These findings are not challenged.
The two Courts concurrently found that the resale held on April 21, 1952 was genuine and was effected at a proper price on due notice and after proper advertisement.
Mr. Gupte attempted to challenge these findings, but we see no reason to interfere with them.
The principal argument advanced by Mr. Gupte was that the property in the goods resold on April 21, 1952 had not passed to the appellants and the resale was consequently invalid.
We are inclined to accept this argument.
It is to be noticed that the contract did not envisage any loan of money by ,the respondent to the appellants on the security of the newsprint in sheets.
The payment of Rs. 3,18,706 9 10 was made by the respondent towards part discharge of its liability for the price of the newsprint in reels.
No. doubt, the contract stated: "We shall advance you moneys against this newsprint at annas 8 per lb.
This advance will carry interest at 5 per cent per annum.
" But the real import of this clause was that the appellants would pay interest at 5 per cent per annum on an amount equivalent to the price of the newsprint in sheets calculated at 8 annas per lb.
The respondent was not a pledge of the newsprint in sheets and had no right to sell the goods under section 176 of the .
The real question is whether the respondent had the right to resell the goods under section 54(2) of the .
243 The seller can claim as damages the difference between the contract price and the amount realised on resale of the goods where he has the right of resale under section 54(2) of the .
The statutory power of resale under section 54(2) arises if the property in the goods has passed to the buyer subject to the lien of the unpaid seller.
Where the property in the goods has not passed to the buyer, the seller has no right of resale under section 54(2).
The question is whether the property in the 300 tons of newsprint in sheets had passed to the appellants before the resale.
On November 13, 1951, the respondent agreed to sell to the appellants tile stock of 415 tons of newsprint in sheets then lying in the respondent 's godown in Madras.
There was an unconditional contract for the sale of specific goods in a deliverable state and the property in the goods then passed to the appellants.
But on November 26, 1951, the contract was varied in a material particular.
The parties, agreed that the appellants would buy only 300 tons of the stock of 415 tons of newsprint then lying in the respondent 's godown.
The result was that in place of the original contract for sale of specific goods a contract for sale of unascertained goods was substituted.
Rajagopala Ayyangar, J. held that the effect of the variation of the contract on November 26, 1951 was that the appellants and the respondent became joint owners of the stock 45 tons.
In our opinion, this was not the correct legal position.
The parties did not intend that the appellants would buy undivided share in 415 tons of newsprint.
On November 26, 1951 the bargain between the parties was that the appellants would buy and the respondent would sell 300 tons out of the larger stock of 415 tons.
The appellate Court held that the property in the entire 415 tons passed to the appellants who were subsequently reviewed from their liability to take 115 tons and that the respondent could resell any 300 tons out of the larger stock of 415 tons.
We are unable to accept 'this line of reasoning.
It is true that originally the property in the entire 415 tons had passed to the appellants.
But the result of the variation of the contract was to annul the passing of property in the goods.
The effect of the bargain on November 26, 1951 was that the respondent would sell and deliver to the appellants any 300 tons out of the larger stock of 415 tons.
As from November 26, 1951, the property in the entire stock of 415 tons belonged to the respondent.
The parties did not intend that as from November 26, 1951 the property in any individual portion of the stock of 415 tons would remain vested in the appellants.
244 Section 18 of the provides that where there is a contract for the sale of unascertained goods no property the goods is transferred to the buyer unless and until the goods are ascertained.
It is a condition precedent to the passing property under a contract of sale that the goods are ascertained.
The condition is not fulfilled where there is a contract for sale of a portion of a specified larger stock.
Till the portion is identified and appropriated to the contract, no property passes to the buyer.
In Gillett vs Hill(1), Bayley, B. said: "Where there is a bargain for a certain quantity extra greater quantity, and there is h power of selection in the vendor to deliver which he thinks fit, then the right to them does not pass to the vendee until the vendor has made his selection, and trover is not maintain able before that is done.
If I agree to deliver a certain quantity of oil as ten out of eighteen tons, on one can say Which part of the whole quantity I have agreed to deliver until a selection is made.
There is no individuality until it has been divided.
" No portion of 415 tons of the newsprint lying in the respondent 's godown was appropriated to the contract by the respondent with the appellants 's consent before the resale.
On the date of the resale, property in the goods had not passed to.
the buyer Consequently, the respondent had no right to resell the goods under section 54(2).
The claim to recover the deficiency on resale is not suitable.
The respondent to claim as damages the difference between the contract price and the market price on the date of the breach.
Where no time is fixed under the contract of sale for acceptance of the goods, the measure of damages is prima facie the difference between the contract price and the market price on the date of the refusal by the buyer to accept the goods, see Illustration (c) to section 73 of the .
In the present case, no time was fixed in the contract for acceptance of the goods.
On March 29, 1952, the appellants refused to accept the goods.
The respondent is entitled to the difference between the contract price and the market price on March 29, 1952.
Counsel for both parties requested us that instead of remanding the matter we should assess the damages on this basis and finally dispose of the matter.
We have gone through the materials on the record and with the assistance of counsel, we assess the market price of the Russian newsprint in sheets on March 29, 1952 at 8 annas per lb.
Counsel on both sides agreed to this assessment.
The claim of the respondent for Rs. 6,7)8 5 1 on account of interest and Rs. 1,119 6 0 for insurance charges is admitted (1) ; , ,873.
245 before us by Mr. Gupte.
On this basis, the final position is as follows: (Rupees) Price of 122324 lbs.
at 91 1/2 annas per lb.
less Rs. 63,032 15 9 9,596 14 3 Difference on 547051 lbs.at 11/2 annas per lb.
51,286 0 6 Interest 6,795 5 1 Insurance charges .
1,119 6 0 Total amount due to the respondent . 68,797 9 10 Deduct amount due to the appellants . 57,816 13 2 Balance due to the.respondent . . 10,980 12 8 In the result, Civil Appeal No. 165 of 1965 is allowed in part, the decrees passed by the Courts below are varied by substituting therefore a decree in favour of the respondent against the appellants for a sum of Rs. 10,980 12 8 with interest thereon at 6 per cent per annum from July 30, 1952.
The decrees for 'costs passed by the Courts below are affirmed.
There will be no order as to costs in this Court.
Civil Appeal No. 166 of 1965 is dismissed.
No order as to cost thereof.
V.P.S. C.A. 165 of 1965 allowed in part.
C.A. 166 of 1965 dismissed. | On 13th November 1951, the respondent agreed to sell to the appellants a stock of 415 tons of newsprint in sheets then lying in the respondent 's godown.
On 26th November, the parties varied the contract by agreeing that the appellants would buy only 300 tons out of the.
stock of 415 tons.
After taking delivery of a part of the newsprint, the appellants refused to take delivery of the balance and repudiated the contract on 29th March 1952.
On 21st April the respondent, after notice to the appellants.
resold the balance at a lesser rate.
The suit flied by the respondent claiming from the appellants the deficiency on resale was decreed.
In appeal to this Court, Held: (1) The claim was unsustainable.
(a) As the respondent was not a pledge of the newsprint, the respondent had no right to sell the goods under section 176 of the .
[242H] (b) A seller can claim as damages the difference between the contract price and the amount realised on resale of the goods where he has the right of resale under section 54 (2) of the Indian .
But this statutory power of resale arises only if the property in the goods has passed to the buyer subject to the lien of the unpaid seller.
Under section 18 of the Sale of Goods Act.
it is a condition precedent to the passing of property under a contract of sale that the goods are ascertained.
In the present case, when the contract was originally entered into for the sale of 415 tons there was an unconditional contract for the sale of specific goods in a deliverable state and the property in those goods then passed to the appellants.
But the effect of the variation was not to make the appellants and respondent joint owners of the stock of 415 tons.
Nor was it merely to relieve the appellants from their liability to take 115 tons.
The effect was to annul the passing of the property.
so that.
as from 26th November the property in the entire stock of 415 tons belonged to the respondent.
The result was that in place of the original contract for sale of specific goods a contract for sale of unascertained goods was substituted.
No portion of the stock of 415 tons was appropriated to the contract by the respondent with the appellants ' consent before the resale.
Therefore, on the date of resale.
the property in the goods had not passed to the buyer (appellants) and the respondent had no right to resell.1243A. E. F H; 244A B] Gillett vs
Hill; ,, ; , applied.
(2) As no time was fixed under the contract of sale for acceptance of the goods, under section 73 of the Indian Contract Act, the respondent was entitled to the difference between the contract price and the market price on 29th March 1952, the date of repudiation, as damages.
[244E C] 240 |
Appeals Nos.
581 to 584 of 1966.
Appeals by special leave from the judgment and order dated March 26.
1964 of the Calcutta High Court in Income tax Reference No. 6 of 1961.
K. Sen, Bishan Narain, R.K. Chaudhuri and B.P. Maheshwari, for the appellant (in all the appeals).
Niren De, Solicitor General, T.A. Ramachandran, R. N. Sachthey and S.P. Nayar, for the respondent (in all the appeals) 354 The Judgment of the Court was delivered by Bhargava, J.
These appeals came up before this Court on the 17th April, 1967, when an order of remand was made by this Court, asking the Income tax Appellate Tribunal to submit a further statement of the case.
The question that has come up.
for consideration is : "Whether on the facts and circumstances of the case, the surplus derived by the assessee in the sale of its shares and securities in the relevant previous years was a revenue receipt and as such taxable under the Income Tax Act.
" The facts and circumstances under which the question was referred by the Tribunal for the opinion of the High Court are mentioned in that order of remand and need not be repeated.
In the order of remand, it was pointed out that it was not possible to find out from the statement of the case whether the Tribunal accepted the explanation of the assessee that, in the previous year relevant to the assessment year 1953 54, the control of McLeod & Co. Ltd. went out of the hands of the Directors of the assessee and it was for this reason that the assessee sold the shares of McLeod & Co. It was also pointed out further that the Tribunal had not stated what was the object of the assessee in buying 6,900 ordinary shares of McLeod & Co. It appeared from the order of the Income tax Officer that these shares were purchased in a number of lots from the year 1948 to 1950, and it was also not stated as to what was the object in buying other securities, and why did the assessee confine its activities mostly to the shares of McLeod & Co. Ltd. and the companies managed by McLeod & Co. Ltd. It was in the light of these omissions that the Tribunal was asked to send a supplementary statement.
That supplementary statement has now been received and the answer to the question has to be given on the basis of the facts contained in the original statement of the case as well as this supplementary statement.
The relevant facts which emerge out of these statements of the case are that the principal activity of the assessee was investment of its capital in shares and stocks.
It changed its investments by sale of its shares and stocks from time to time.
The income of the Company was primarily derived from dividends on shares and interest received by it on the investments.
These activities were covered by Clauses (1), (3) and (4) of the Memorandum of Association.
The activity mentioned as the object in Clause (2) is: "to acquire,hold, sell and transfer shares, stocks, Debentures, 'Debenture Stocks, Bond, obligations and 355 securities issued or guaranteed by any company constituted or carrying on business in British India and in the United Kingdom or in any colony, or dependency or possession thereof or in any foreign country and Debenture Stocks, Bonds, obligations and securities, issued or guaranteed by any Government, Sovereign, Ruler, Commissioners, public body or authority supreme, Municipal ' Local or otherwise whether at home or abroad." In the supplementary statement, the Tribunal has recorded the finding that, in its opinion, the purchases and sales of the shares in question were in pursuit of this clause (2) in the Memorandum of Association.
The Tribunal has further stated that the assessee had not placed any evidence as to the object behind the acquisition of the shares of McLeod & Co. Ltd and the shares of companies managed by McLeod & Co. Ltd., nor had the Income tax Officer ascertained the object behind such acquisitions.
The Tribunal was also unable to find out why the assessee had more or less confined its activities mostly to the shares of McLeod & Co. Ltd. and the companies managed by McLeod & Co. Ltd. The facts proved showed that, in the account year relevant to the assessment year in question, 21,046 shares were held by the Kanoria group, including 6,977 shares in McLeod & Co. Ltd. held by the assessee.
Mr. C.L. Kanoria resigned his office as Director of McLeod & Co. Ltd. on 17th March, 1952, and the approval of the Government to his resignation was given by the Central Government on 16th October, 1952.
Thereafter, Sri C.L. Bajoria joined the Directorate of McLeod & Co. Ltd. 6,900 shares.
were sold by the assessee to Sri C.L. Bajoria or his nominees on 27th May, 1952, at a time when Sri C.L. Kanoria had already sent in his resignation from the office of Director, but the resignation had not yet been accepted by the Government.
It has also, been found that Sri C.L. Bajoria acquired 12,440 shares in all.
including 6,900 shares purchased from the assessee; but there was no material on the record to prove that his group obtained a controlling interest in McLeod & Co. Ltd. as a result of acquisition of ' these shares.
As a fact, it was held that after the resignation of Sri C.L. Kanoria, Messrs C.L. Bajoria and Baijnath Jalan, both ; of M/s. Soorajmull Nagarmull, became Directors of McLeod & Co. Ltd. These are the principal facts on the basis of which it has to be determined whether the sale of these shares by the assessee resulted in a revenue receipt or in a capital gain.
It appears to us that the facts and circumstances in this case can lead to.
no other conclusion, except that these shares were purchased and sold by the assessee with the motive of earning a profit by such purchases and sales and not with the object of investing its capital in these shares in order to derive 356 income from that investment.
It is true that the principal business of the assessee was to invest capital and to derive income from dividends on shares and interest on other investments; but at the same time, the object contained in the Memorandum of Association of the assessee Company clearly showed that one of the objects was also to deal in shares, stocks, debentures, etc., by acquiring, holding, selling and transferring them.
In the years prior to the assessment year, the case put forward by the assessee that the various acquisitions and sales of shares were in the nature of investments was accepted by The Department but such a decision given in the earlier years is not binding in the proceedings for assessment during subsequent years.
The particular shares no,in question.
it appears, were purchased between 31st March,1948 and 31st March, 1952.
The earliest purchases in March.1948 were at an average price of Rs. 267 13 0 per share.
In the next two years ended 31st March, 1949 and 31st March, 1950.the average purchase price was Rs. 201 8 0 and Rs. 182 10 0.and the last purchase in the year ended 31st March, 1952 was at the rate of Rs. 128 14 0.
On 1st April.
1952, the assessee 's total holding of shares in McLeod & Co. Ltd. was 6,977 at a total cost of Rs./4,29,587 4 0 out of the total holding of shareS, including shares in other companies, of the value of Rs. 17,58,741 4 0.Thus, on that date, the holdings in McLeod & Co. Ltd. formed the major part of the share holdings of the assessee.
It is significant that the shares were purchased during a period when their market price was continuously falling.
The earliest purchases in the year ended 31st March, 1948 were at an average price Rs. 267 13 0, while in the last of these three years ended 31st March 1952, the average price was Rs. 128 14 0.
The largest block of 4,757 shares was purchased in the year ended 31st March, 1950, when the average price was Rs. 182 10 0.
The assessment order of the Income tax Officer also shows that the shares were not only purchased in a rapidly falling market, but, in order to make these purchases the assessee had taken loans amounting to about Rs. 8 lacs at interest varying from 31/2% to 5 %.
The dividend being declared was at a very low rate, so that the return on this investment, after taking into account the interest paid and super tax to be paid, came to a very small percentage.
being less than 1%.
This circumstance that the shares were purchased at a time when their prices were falling and the return on investments was not at all substantial while loans had been taken to purchase these shares strongly points to a conclusion that the shares could not have been purchased as an investment to earn income from dividends and that the purchases of these shares were with the object of selling them subsequently at a profit.
The shares were in fact, sold at considerable profit subsequently and that is how the question of charging that profit to tax as revenue receipt has arisen.
The explanation sought to be given by the 357 assessee that the shares were, in fact, being held as investment and were sold simply because the control of McLeod & Co. Ltd. went out of the hands of the Directors of the assessee has not been proved, according to the supplementary statement of the case submitted by the Tribunal.
In fact, the Tribunal was not satisfied that even the purchasers, viz., the Bajoria group on buying these shares from the assessee acquired a controlling interest in McLeod & Co. Ltd. or in the companies managed by that Company.
The object of the sale as given by the assessee has therefore, remained unproved, whereas the fact that the purchases of the shares were made at a time when they were not expected to give a good return as investment and were actually sold at a very good profit leads to the reverse inference that the purchases and sales of these shares were an adventure in the nature of trade.
Even the sequence of events does not bear out the contention of the assessee.
Sri C.L. Kanoria first resigned on 17th March, 1952 and he sold his shares while his resignation was still pending for approval by the Government.
The sale took place on 27th May 1952, at a time when the resignation not having received the approval of the Government, the control of McLeod & Co. Ltd. group of companies was still with the Kanoria group.
The resignation was accepted on 16th October, 1952, about five months after the sale of the shares.
There is no evidence.
to show that, as a result this sale.
the control in the McLeod & Co. group of companies passed to the Bajoria group though M/s. C.L. Bajoria and Baijnath Jalan did subsequently loin the Directorate of McLeod & Co. Ltd. On these facts, it is not possible to hold that the Tribunal was incorrect in recording it5 conclusion that the sale of these shares by the assessee was not the result of control of the McLeod & Co. Ltd. passing from the. hands of Kanoria group to the Bajoria group.
In fact the Kanoria group was holding a majority 21,046 shares out of 40,000 shares in McLeod & Co. Ltd. even at the time when these shares were sold on 27th May, 1952.
The assessee thus having failed to prove the object of the sale of these shares, the inference that the shares were sold with the sole object of earning profit is justified.
This conclusion is further strengthened by the conduct of the assessee as found by the Tribunal in subsequent years.
In the year ended 31st March, 1955, the assessee again purchased a large number of shares of McLeod & Co. Ltd. These purchases were made between 23rd August, 1954 and 29th September, 1954.
The first purchases were made at a rate of Rs. 150/ per share.
and the purchases were continued even in the month of September when the rate rose to nearly Rs. 250/ per share.
This purchase of shares of McLeod & Co. Ltd. in the account year 1954 55.
when there was a rising market and when the control was no longer with the Kanoria group and having already passed to the 358 Bajoria group, clearly shows that the Tribunal was not wrong in inferring that the purchases of shares of McLeod & Co. Ltd. were not for the purpose of keeping controlling interest in that Company or for investment, but that the shares were being purchased and sold for earning profit, so that the transactions were an adventure in the nature of trade in these shares of McLeod & Co. Ltd. In this connection, Mr. A.K. Sen, learned counsel for the appellant drew our attention to the following view expressed in the remand order : "We are unable to answer the question referred because the mere fact that an investment company periodically varies its investments does not necessarily mean that the profits resulting from such variation is taxable under the Income tax Act.
Variation of its investments must amount to dealing in investments before such profits can be taxed as income under the Income tax Act.
" Reliance was also.
placed on the observations of this Court in Bengal and Assam Investors Ltd. vs Commissioner of Income tax, West Bengal(1), which were quoted in the remand order and are as follows : "It seems to us that, on principle before dividends on shares can be assessed under section 10, the assessee, be it an individual or a company or any other entity, must carry on business in respect of shares; that is to say, the assessee must deal in those shares.
It is evident that if an individual person invests in shares for the purpose of earning dividend, he is not carrying on a business.
The only way he can come under section 10 is by converting the shares into stock in trade, i.e., by carrying on the business of dealing in stocks and shares as did the assessee in Commissioner of Income Tax vs Bai Shirinbai K. Kooka(2) ' '.
It was urged that, in this case, the Tribunal has recorded no finding at all that the shares in McLeod & Co. Ltd. which were sold by the assessee were converted by it into stock in trade, nor has it been held that the variation of its investments by the assessee amounted to dealings in investments.
The facts that we found above show that, so far as the shares of McLeod & Co. Ltd. and the allied companies which were sold by the assessee and the income from which has been taxed as revenue income are concerned, the assessee, in fact, dealt with them as stock in trade.
It (1) (2) 359 is true that in the account books they were never shown as such; but we have indicated how the evidence and the material in this case lead to the conclusion that the shares were in fact purchased even initially not as investments, but for the purpose of sale at profit and that they were actually sold with the purpose of earning profit, so that the transactions amounted to an adventure in the nature of trade.
Learned counsel also referred ,to the decision of this Court in Ram Narain Sons (Pr.) Ltd. v Commissioner of Income tax, Bombay(1) to urge that the principal consideration in determining whether income from sale of shares is revenue income or capital gain, is to find out what was the purpose of purchase of those shares, and, if the purpose was investment, the fact that.
in varying the investment, the sale of those shares resulted in a profit will not.
make that profit revenue income.
The principle is perfectly ' correct, but is not applicable to.
the case before us on the finding mentioned by us above that even the initial purchase of these shares by the assessee was not for the purpose of investment for earning income from dividends, but was with a view to earn profit by resale of those shares.
In these circumstances we hold that the High Court was right in arriving at the conclusion that, on the facts and circumstances of the present case, the income derived by the assessee from the sale of its shares and securities in the relevant previous years was revenue receipt and as such taxable under the Income tax Act.
The appeals fail and are dismissed with costs.
One hearing fee.
Y.P. Appeals dismissed. | The principal activity of the assessee was investment of its capitals in shares and stocks.
It changed its investments by sale of its shares and stocks from time to time.
The assessee 's income was primarily derived from dividends on shares and interest derived by it on the investments.
The assessee purchased the shares of a company when their prices were falling by taking loan at interest and the return on investment was not at all substantial.
The assessee 's explanation that the shares were, in fact, being held as investment and were sold simply because the control of the company went out of the hands of the Directors of the assessee.
was not accepted by the Tribunal.
HELD: The income derived by the assessee.
from the sale of these shares was revenue receipt and as such taxable under the, Income tax Act.
From the evidence about the course of dealings and conduct of the assessee the conclusion followed that the purchases of the shares were not for the purpose of keeping controlling interest in that company, or for investment, but shares were being purchased and sold for earning profit, so that the transactions were an adventure in the nature of trade in these shares.
[359 A B] The acceptance by the Revenue, in the earlier years, that the acquisitions and sales of shares were in the nature of investments, was not binding in the proceeding for assessment during subsequent years.
[356 B C] Bengal and Assam Investors Ltd. vs Commissioner of income tax,West Bengal, and Commissioner of Income tax vs
Bai Shrinbai K. Kooka, , referred to.
Ram Narain Sons (P) Ltd. vs Commissioner of Income tax, Bombay. , held inapplicable. |
minal Appeal No. 50 of 1965.
Appeal by special leave from the judgment and order dated February 15, 1965 of the Bombay High Court in Criminal Revi sion Application No. 917 of 1964.
A. section R. Chari, O. P. Malhotra, V. N. Ganpule, P. C. Bhartari, and O. C. Mathur, for the appellants.
M. section K. Sastri and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by special leave against the judg ment of the High Court of Bombay in criminal revision application No. 917/64, the question that arises for decision is whether on the facts found by the courts below, the appellants were properly held to be guilty of all or any of the offences for which they have been convicted.
In the trial court there were as many as nine accused.
All the accused excepting accused Nos. 1 and 2 who are appellants 1 and 2 respectively in this Court, were, acquitted.
The prosecution case is as follows : The acquitted third ac cused was the owner of the jeep bearing registration No. BYF 5448.
Accused ,No. 2 is his father.
They are the residents of Malshiras.
On October 27, 1962, the appellants along with PW Rambhau Bhombe and one other, went in the jeep in question first to Phaltan which is about 33 miles away from Malshiras, from there to Rajale about seven miles away from Phaltan.
From Rajale they returned to Phaltan and from there to Malegaon.
They stayed for the night at Malegaon.
Next day they returned to Phaltan and finally to Malshiras.
During all this time, appellant No. 1 was driving the jeep.
On the way from Phaltan to Malshiras, about a mile and a half from Phaltan, the jeep struck one Bapu Babaji Bhiwarkar, as a result of which he sustained serious injuries.
The appellants put the injured person in the jeep and brought back the jeep to Phaltan where they approached PW Dr. Karwa for medical aid, but Dr. Karwa refused to treat the injured as it was a medico legal case.
He asked them to go to Government Dispensary.
The appellants instead of going to the Government Dispensary, drove straight to Malshiras.
On the way the injured died.
At Malshiras the appellants cremated his dead body.
At the time of the incident, the first appellant had 517 only a learner 's licence and no person having a valid licence for driving was by his side.
The courts below have accepted the above facts and on the basis of those facts, the trial court convicted the appellant No. 1 under section 304A IPC, section 3 read with section 112 of the Motor Vehicles Act and under section 89 of the same Act.
It convicted the second appellant under section 201 IPC, section 5 as well as under section 89 of the Motor Vehicles Act.
These convictions were affirmed by the learned Sessions Judge of Satara in appeal and by the High Court in revision.
The conviction of the first appellant under the provisions of the Motor Vehicles Act was not challenged before us, but we fail to see how the second appellant could have been convicted either under section 5 or under section 89 of the Motor Vehicles Act.
In convicting him under those provisions, the courts below appear to have overlooked the fact that he was not the owner of the jeep.
Nor was there any proof that he was in charge of the jeep.
Hence, his convictions under those provisions cannot be sustained.
The conviction of the appellant No. 2 under section 201 IPC de pends on the sustainability of the conviction of appellant No. 1 under section 304A IPC.
If appellant No. 1 was rightly convicted under that provision, the conviction of appellant No. 2 under section 201 IPC on the facts found cannot be challenged.
But on the other hand, if the conviction of appellant No. 1 under section 304A IPC cannot be sustained, then, the second appellant 's conviction under section 201 IPC will have to be set aside, because to establish the charge under section 201, the prosecution must first prove that an offence had been committed not merely a suspicion that it might have been committed and that the accused knowing or having reason to believe that such an offence had been committed, and with the intent to screen the offender from legal punishment, had caused the evidence thereof to disappear.
The proof of the commission of an offence is an essential requisite for bringing home the offence under section 201 IPC see the decision of this Court in Palvinder Kaur vs State of Punjab (1).
Therefore the principal question for decision is whether on the facts found, appellant No. 1 was rightly convicted under section 304A IPC.
On the material on record it is not possible to find out under what circumstances the accident took place.
The High Court in its judgment specifically says that "There are no witnesses whose evidence can establish rash and negligent driving on the part of accused No. 1.
" We may go further and say that there is absolutely no evidence to show that the accused was responsible for the accident.
The prosecution has not produced any evidence to show as to how the accident took place.
The High Court observed: (1) 518 'It is however, a fact conclusively established and not disputed before me that the accused No. 1 had only a learner 's licence at the material time.
It is not even suggested before me that accused No. 2 held a driving licence so that he could act as a trainer for accused No. 1.
In fact, there is no suggestion by the defence that there was a trainer by the side of accused No. 1.
Thus on the facts established, it is quite clear that at the material time, the jeep was driven by accused No. 1, who not only did not have a valid driving licence, but had only a learner 's licence.
The question for consi deration, therefore, is whether driving a jeep on a public road by a person, who does not know driving and is consequently unable to control the vehicle, is a rash and negligent act as contemplated by Section 304A IPC." The court answered that question in these words "The very fact that the person concerned holds only a learner 's licence, in my opinion, necessarily implies that he does not know driving and must be assumed to be incapable of controlling the vehicle.
If a person who does not know driving and is a consequently not able to control a car or a vehicle, chooses to drive a car or a vehicle on a public road without complying with the requirements of Rule 16 of Bombay Motor Vehicles Rules, he obviously does an act, which can be said to be rash and negligent, as contemplated by Sec.
304A IPC.
It is negligent because he does not take the necessary care of having a trainer by his side.
It is rash because it utterly disregards the public safety.
Prima facie it appears to me that driving a vehicle like a jeep or motor car on a public road without being qualified to drive, particularly in the absence of any evidence to show that the person concerned had the necessary experience and good control over the vehicle would amount to a rash and negligent act, as contemplated by Sec.
304A IPC.
" Assuming that the High Court was right in its conclusion that appellant No. 1 had not acquired sufficient proficiency in driving therefore he was guilty of a rash or negligent act in driving the jeep that by itself is not sufficient to convict him under section 304A IPC.
The, prosecution must go further and prove that it was that rash or negligent act of his that caused the death of the deceased.
Section 304A says "Whoever causes the death of any person by doing any rash or negligent act not amounting to culpable 519 homicide shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both." The requirements of this section are that the death of any person must have been caused by the accused by doing any rash or negligent act.
In other words, there must be proof that the rash or negligent act of accused was the proximate cause of the death.
There must be direct nexus between the death of a person and the rash or negligent act of the accused.
As mentioned earlier there is no evidence to show that it was rash or the negligent act of the accused that caused the death of the deceased.
Before referring to the decided cases, we would like to revert to prosecution evidence for finding out whether the High Court was right in its inference that the accused was novice in the matter of driving.
From the prosecution evidence itself it is clear that he drove the jeep to various places on October 27, 1962.
Then there was the evidence of PW Shankar Burmule, showing that he had seen accused No. 1 driving for about six months to a year.
The learned Judge of the High Court discarded his evidence with these observations : "In the present case, Mr. Jahagirdar relies on the evidence of Shankar Burmule, which is at Exh. 39, to contend that accused No. 1 had considerable driving experience.
Unfortunately the English notes of evi dence by the learned trial Magistrate do not indicate that the witness stated that accused No. 1 had driving experience, but the evidence recorded in Marathi undoubtedly indicates that the witness claims to have seen accused No. 1 driving for about six months to a year.
The witness seems to be a relation of accused No. 2, though not a near relation, and his word cannot be taken at par.
Moreover the admitted fact that at the material time accused No. 1 held only a learner 's licence itself indicates that no importance can be attached to the abovesaid statement of Shankar Burmule.
It is also urged that accused No. 1 did take the jeep from Malshiras to Phaltan and to some other places and that also would bear out the statement of Shankar Burmule.
All that I can say is that it was a sheer stroke of good fortune that accused No. 1 did not meet with any accident during his trip from Malshiras to Phaltan and some other places." With respect to the learned Judge we think this was not the proper way of appreciating evidence.
Conclusions must be based on the evidence on record.
PW Shankar Burmule has given material 520 evidence against the accused.
His evidence establishes an important link in the prosecution case.
He could not have been compelled to give that evidence if he was not a truthful witness.
The learned public prosecutor did not make any attempt in his reexamination to show that any portion of his evidence was untrue.
There is no presumption in law that a person who possesses only a learner 's licence or possesses no licence at all does not know driving.
For various reasons, not excluding sheer indifference, he might not have taken a regular licence.
The prosecution evidence that appellant No. 1 had driven the jeep to various places on the day previous to the occurrence is a proof of the fact that he knew driving.
There was no basis for the conclusion that it, was a sheer stroke of good fortune that he did not meet with any accident on that day.
Now let us turn to the decided cases.
Dealing with the scope of section 304A IPC, Sir Lawrence Jenkins observed in Emperor vs Omkar Rampratap(1) : "To impose criminal liability under section 304A, Indian Penal Code, it is necessary that the death should have been the direct result of a rash and negligent act of the accused, and that act must be the proximate and efficient cause without the intervention of another 's negligence.
It must be the cause causans, it is not enough that it may have been the cause sine qua non.
" That, in our opinion is the true legal position.
The scope of section 304A IPC came to be considered by this Court in Kurban Hussein Mohammedali Rangwalla vs State of Maharashtra(2).
In our opinion, the ratio of that decision governs the facts of the present case.
The facts of that case were : The appellant was the manager and working partner of a firm which manufactured paints and varnish.
The factory was licensed by the Bombay Municipality on certain conditions to manufacture paints involving a cold process and to store certain Specified quantities of turpentine, varnish and paint.
The factory did not have a licence for manufacturing wet paints but nevertheless manu factured them.
Four burners were used in the factory for the purpose of melting rosin or bitumen by heating them in barrels and adding turpentine thereto after the temperature cooled down to a certain degree.
While this unlicensed process was going on froth overflowed out of the barrel and because of heat varnish and turpentine, which were stored at a short distance caught fire, as a result of which seven workmen died.
The appellant was prosecuted and convicted under section 304A and section 285, IPC.
Hi, , appeal was summarily dismissed by the Bombay High Court.
This Court set aside the conviction under section 304A IPC, holding that (1) 4B.L.R. 679.
(2) ; 521 the mere fact that the appellant allowed the burners to be used in the same room in which varnish and turpentine were stored, even though it would be a negligent act, would not be enough to make the appellant responsible for the fire which broke out.
In the course of the judgment this Court observed that the cause of the fire was not merely the presence of the burners within the room in which varnish and turpentine were stored, though that circumstance was indirectly responsible for the fire which broke out; what section 304A requires is causing of death by doing any rash or negligent act and this means that death must be the direct or proximate result of the rash or negligent act.
On the basis of the facts of that case, this Court held that the direct and proximate cause of the fire which resulted in seven deaths was the act of one of the workmen in pouring the turpentine too early and not the appellant 's act in allowing the burners to burn in the particular room.
In the present case, we do not know what was the proximate cause of the accident.
We cannot rule Out the possibility of the accident having been caused due to the fault of the deceased.
The question whether appellant No. 1 was proficient in driving a jeep or not does not conclude the issue.
His proficiency in driving might furnish a defence, which a learner could not have, but the absence of proficiency did not make him guilty.
The only question was whether, in point of fact he was not competent to drive and his incompetence was the cause of death of the person concerned.
On behalf of the prosecution reliance was placed on the de cision of this Court in Juggankhan vs State of Madhya Pradesh (1), to which one of us was a party (Sikri, J).
The ratio of that decision does not apply to the facts of the present case.
In that ,case, it had been conclusively proved that the rash or negligent act ,of the accused was the cause of the death of the person concerned.
For the reasons mentioned above, we are unable to agree 'with the courts below that on the basis of the facts found by them the first appellant could have been held guilty under section 304A IPC.
We accordingly allow his appeal and acquit him of that offence.
From that finding, it follows that the second appellant could not have been convicted under section 201 IPC.
In the result, the second appellant 's appeal is allowed in full and he is acquitted of all the charges.
The first appellant 's appeal is allowed in part and his conviction under section 304A is set aside.
But his other convictions are sustained, namely, his convictions under section 3 read with section 112 of the Motor Vehicles Act and section 89 of the same Act, for which offences only a sentence of fine had been imposed upon him.
Appeal allowed. | The first appellant holding only a learner 's licence was driving a jeep without a trainer by his side and injured a person.
The first appellant and his companion in the journey the second appellant put the injured in the jeep for getting medical aid, but the injured died on the way.
They cremated the dead body.
The first appellant was convicted under section 304 A I.P.C. and sections 3, 89 and 112 of the Motor Vehicles Act and the second appellant under section 201 I.P.C., and sections 5 and 89 of the Motor Vehicles Act.
HELD : There was no evidence to show that the first appellant was responsible for the incident so his conviction under section 304 A could not be sustained.
[517 H] The requirements of section 304 A I.P.C. are that the death of any person must have been caused by the accused by doing any rash or negligent act.
In other words, there must be proof that the rash or negligent act of the accused was the proximate cause of the death.
There must be direct nexus between the death of a person and the rash or negligent act of the accused.
There is no presumption in law that a person who possesses only a learner 's licence or possesses no licence at all does not know driving.
For various reasons, not excluding sheer indifference, he might not have taken a regular licence.
The prosecution evidence that first appellant had driven the jeep to various places on the day previous to the occurrence war.
a proof of the fact that he knew driving.
[519 B C; 520 B C] The question whether first appellant was proficient in driving a jeep or not does not conclude the issue.
His proficiency in driving might furnish a defence.
which a learner could not have, but the absence of proficiency did not make him guilty.
[521 D E] As the conviction of the first appellant under section 304 A I.P.C. could not be sustained, the conviction of second appellant under section 201 I.P.C. had to be set aside.
Because to, establish the charge under section 201, the prosecution must first prove that an offence had been committed not merely a suspicion that it might have been committed and that the accused knowing or having reason to believe that such an offence had been committed, and with the intent to screen the offender from legal punishment, had caused the evidence thereof to disappear.
The proof of the commission of an offence is an essential requisite for bringing home the offence under section 201 I.P.C. [517 D G; 521 F G] Palvinder Kaur vs State of Punjab, , and Kurban Hussein Mohammedan Rangwalla vs State of Maharashtra ; , followed.
Emperor vs Omkar Rampratap 4 B.L.R. 679, approved.
516 Juggankhan vs State of Madhya Pradesh, ; distinguished.
The 'second appellant could not be convicted either under section 5 or section 89 of the Motor Vehicles Act.
In convicting him under those provisions, the fact that he was not the owner of the jeep had been overlooked.
Nor was there any proof that he was in charge of the jeep. |
ivil Appeal No. 34 of 1958.
Appeal by special leave from the order dated July 6, 1956, of the Calcutta High Court in appeal to the section C. No. 32 of 1955.
N. C. Chatterjee and D. N. Mukherjee, for the appellants.
Syamdas Bhattacharya and section N. Mukherjee, for the respondents.
March 29.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
The short question of law which arises in this appeal is whether the Calcutta High Court had jurisdiction to extend the time for 645 furnishing security for costs of the respondents under 0.
45, r. 7, of the Code of Civil Procedure.
The Calcutta High Court has held that it had no jurisdiction to extend time as prayed for by the appellants, and so the certificate already granted by it to the appellants to appeal to this Court against its own decree has been cancelled.
The order canceling the said certificate has given rise to this appeal by special leave; and so the only question which we are ca.
led upon to consider is one of construing 0.
45, r. 7, of the Code as well as 0.
XII, r. 3, of the Supreme Court Rules.
The relevant facts leading to the present controversy are not in dispute.
The appellants had instituted a suit (No. 73 of 1944) in the First Additional Court of the Subordinate Judge of 24 Parganas against the six respondents.
In this suit they claimed a declaration of title to the immovable property in question and prayed for recovery of possession of the said property together with mesne profits.
The learned trial judge decreed the suit on March 20, 1948.
Two appeals were then filed against the said decree by two sets of respondents (Appeals Nos. 111 of 1948 and 135 of 1948).
Of these two appeals Appeal No. 135 of 1948 was dismissed but Appeal No. III of 1948 was partly allowed and the decree passed in favour of the appellants granting possession and mesne profits to the appellants against respondent 3 was set aside.
Thereupon the appellants applied for and obtained a certificate from the Calcutta High Court to enable them to appeal to this Court.
The decree under appeal was one of reversal and the valuation of the subject matter of the dispute both in the trial court and in the intended appeal before this Court exceeded the statutory limit prescribed in that behalf and so the appellants 'were in fact entitled to a certificate under article 133 (1)(a) of the Constitution.
Accordingly a certificate was issued on May 18, 1956.
The last date for the deposit of the security amount of Rs. 2,500 and the printing cost of Rs. 1,184 was June 29, 1956.
According to the appellants owing to circumstances over which they had no control they could not deposit 646 he said two amounts on the due date.
Consequently in July 4, 1956, they filed an application before the High Court praying that the requisite amounts tendered by them be accepted after condoning the delay made by them in the payment of the said amounts.
This application was rejected on the ground that according to the uniform current of decisions in the said Court it had no jurisdiction to extend the time for depositing the amount of security.
It is against this order that the appellants have come to this Court by special leave.
O. 45, r. 7, of the Code occurs in the Chapter dealing with appeals to the Supreme Court, and it deals with the security and deposit which are required to be furnished and made on grant of certificate to a party intending to prefer an appeal to this Court.
0. 45, r. 7(l)(a), provides that where the certificate is granted the applicant shall, within ninety days or such further period, not exceeding sixty days, as the Court may upon cause shown allow, from the date of the decree complained of, or within six weeks from the date of the grant of the certificate, whichever is the later date, furnish security in cash or in Government Securities for the costs of the respondent.
The word "within ninety days or such further period not exceeding sixty days" which occur in the first part of the rule have been added by Act 26 of 1920 in substitution for the words "six months" which were originally enacted in the said rule.
It is common ground, and indeed it is not disputed, that prior to the amendment made in 1920 High Courts had jurisdiction to extend time for furnishing security for cogent and satisfactory reasons.
In Burjore and Bhawani Pershad vs Mussumat Bhagana (1) the Privy Council had held, agreeing with the view taken by the Full Bench of the Calcutta High Court that the words in section 602 of the Code of 1877 (Act X of 1877), in regard to extending time for giving security in appeal were directive only and there was jurisdiction in the High Court to grant extension of time for cogent reason.
In other words, the time of six months prescribed by the (1) [1883] L.R. 11 I.A. 7.
647 statute could not be departed from without cogent reason.
As a result of this decision under the provisions of 0.
45, r. 7, as they stood until the amending ' Act 26 of 1920 was passed, all the High Courts consistently exercised their jurisdiction in the matter of furnishing securities and extended time where they were satisfied that there was a proper and valid reason to do so.
The question which arises for our decision is whether by the amendment made in 1920 this position has been altered.
There can be no doubt that the object of the amendment was to expedite the final decision of the appeals which were taken before the Privy Council, and so the restrictive words have now been introduced whereby the period prescribed by the first part of the rule can.
not be extended beyond 150 days; but, does the use of these restrictive words indicate that there is no jurisdiction in the High Courts to extend the period for a sufficient cause ? Having regard to the fact that even before the amendment the period of six months had been indicated it seems somewhat difficult to hold that by restricting the period to 150 days by the use of the restrictive words the Legislature had intended to take away the preexisting jurisdiction of the High Courts to extend the period for a reasonable cause.
The jurisdiction to enlarge the period for a good cause shown could not have been intended to be taken away by implication merely by the use of the restrictive clause introduced in the amendment.
Besides, it is significant that even after the amendment there is no specific provision which provides for the effect of failure to comply with 0. 45, r. 7.
Rule 8 deals with cases where security has been furnished and deposit made, and it provides that on the security being furnished and deposit made the Court shall declare the appeal admitted, give notice thereof to the respondent, transmit to the Supreme Court the record, as therein provided, and give to either party one or more authenticated copies as specified.
There is no rule which prescribes the consequence of non compliance with the order made under r. 7.
Failure to make this provision is not without significance because r. 11 648 expressly provides for the effect of failure to comply with the order made under r. 10.
In other words, where the Court makes an order calling upon the appellant to furnish within a time to be fixed by it other and sufficient security, or to make within like time the required payment, and the appellant fails to comply with the said order, r. 11 expressly provides that on such failure of the appellant the proceeding shall be stayed and the appeal shall not proceed without an order in that behalf of the Supreme Court and in the meantime execution of the decree appealed from shall not be stayed.
It would thus be seen that where the Legislature intended that failure to comply with a specific order should lead to the consequence of a specific result it has made an appropriate provision in that behalf, and so failure to make any such provision in regard to the consequence of non compliance with the order made under r. 7 may suggest that the jurisdiction of the Court to extend time was not intended to be taken away.
Since it is open to the Court to extend time, the Legislature may have thought that it should be left to the discretion of the Court to decide whether the failure to comply with its order under r. 7 should be condoned and the period extended for furnishing security, or whether the default should not be condoned and the certificate should therefore be cancelled.
In our opinion, therefore, reading 0.
45, r. 7, as amended along with the other relevant provisions of the said Order it would be difficult to hold that the High Court has no jurisdiction to extend time for furnishing security under the said rule.
High Courts had jurisdiction to extend time prior to the amendment of 1920 and the amendment of 1920 has made no difference in that behalf.
There is another statutory provision which leads to the same conclusion, and that is 0.
XII, r. 3, of the Supreme Court Rules framed by this Court in exercise of its rule making powers under article 145 of the Constitution.
Rule 3 reads thus: "Where an appellant, having obtained a certificate from the High Court, fails to furnish the security or make the deposit required, that Court 649 may, on its own motion or on application in that behalf made by the respondent, cancel the certificate, and may give such directions as to the costs of the ' appeal and the security entered into by the appellant as it shall think fit or make such further or other order as the justice of the case requires.
" This rule corresponds exactly to r. 9 of the Privy Council Rules.
On a fair construction of this rule there appears to be no doubt that if a party having obtained a certificate from the High Court fails to furnish security or to make the required deposit it is open to the High Court to adopt either of two courses; it may cancel the certificate and may give directions as to the costs of the appeal and the security entered into by the appellant or it may make such further or other order as the justice of the case may require; and that clearly suggests that the High Court has jurisdiction to consider the question as to whether the justice of the case requires that the certificate already granted should not be cancelled and further time should be given to the party to furnish the security or to make the required deposit.
The last clause of r. 3 refers to such further or other order as the justice of the case requires, and that must necessarily mean an order other than, and different from, the order canceling the certificate.
It is true that the intention behind this rule might have been differently and better expressed but the object of the rule is plain and unambiguous and its construction presents no difficulty whatever.
Failure to furnish the security or to make the deposit in time does not inevitably and in every case lead to the cancellation of the certificate.
Despite the said failure some further or other order according to the justice of the case may still be passed by the Court in its discretion, and that, in our opinion, must mean an order condoning the default and granting further time to furnish the security or to make the required deposit.
If this be the true position about the effect of 0.
XII, r. 3, of the Supreme Court Rules it would follow that the High Courts would have jurisdiction to extend time for furnishing security even 82 650 if r. 7 of 0. 45 after its amendment in 1920 had taken away the said jurisdiction.
Section 112 of the Code expressly provides that nothing contained in the Code shall be deemed, inter alia, to interfere with any rules made by the Supreme Court, and for the time being in force, for the presentation of appeals to that Court or their conduct before that Court.
Therefore, if 0. xII, r. 3, expressly recognises and gives jurisdiction to the High Courts to extend the time for furnishing the security or to make the deposit in a, proper case that provision would not be interfered with by r. 7 of 0. 45.
That is how, apart from the provisions of r. 7 of 0. 45, we reach the conclusion that the Calcutta High Court had jurisdiction to extend time for furnishing the security in the present case.
However, as we have already held the amendment of r. 7 of O. 45 does not really take away the preexisting jurisdiction of the High Courts to extend time and so there is complete harmony between the said rule and 0.
XII, r. 3, of the Supreme Court Rules.
On this question there appears to be consensus of judicial opinion in the decisions of all the High Courts in India except the Calcutta High Court which for some years past has struck a note of dissent.
It is unnecessary to deal with a catena of decisions on which Mr. Chatterjee relied in support of his contentions.
It would be enough merely to mention them.
It appears that in some High Courts the present question was referred to a Full Bench and the decisions of the Full Bench have negatived the view which appears to have been taken by the Division Benches in the said High Courts on the earlier occasions that the High Courts had no jurisdiction to extend time (Vide: Nilkanth Balwant Natu & Ors.
V. Shri Satchidanand Vidya Narsinha Bharati & Ors.
(1) (Full Bench); Bishnath Singh & Ors.
vs Balwant Rao Naik Kalia & Ors.
(Full Bench); Gulam Hussain vs Mansurbeg & Ors.
(Full Bench); Lachmeshwar Prasad Shukul vs Girdhari Lal Chaudhuri (4) (Full Bench); Ghulam Rasul V. Ghulam Qutabud din (5) (Full Bench); Thota Pitchaiah (1) Bom.
(3) I.L.R. (2) I.L.R. [1939] All. 549.
(4) (1040) I.L.R. 19 Pat.
(5) Lah.
447. 651 & Or8. 'V. M. Vedanta Narasimhacharyulu & Ors.
(1) (Full Bench); and Ismail Piperdi vs Momin Bi Bi & Ors.
(2) (Full Bench).
Even in Calcutta it was held by the Calcutta High Court by a Full Bench in Roy Jotindranath Chowdhury & Ors.
vs Rai Prasanna Kumar Banerjee Bahadur & Ors.
(3) that the High Court had power to extend time as provided by section 602 of the Code for depositing the estimated cost of translating, transcribing, indexing and transmitting to the Privy Council the records of the case under appeal, but it was added that the Court should not extend time without some cogent reason.
In support of this conclusion the High Court relied upon the decision of the Privy Council in the case of Burjore and Bhawani Pershad (4).
The same view was expressed by the said High Court in Harendra Lal Choudhry vs Sm.
Hari Dasi Debei (5) where it was held that High Court had power to extend the time for depositing costs in Court but it ought not to do so without some cogent reasons.
In reaching this conclusion the Court followed its earlier decision in the case of Roy Jyotindranath Chowdhury (3).
It, however, appears that in Raj Kumar Govind Narayan Singh & Ors.
V. Shamlal Singh & Ors.(6) Chief Justice Rankin and Ghose, J., took a contrary view and held that there was no jurisdiction to extend time for furnishing the security under 0.
45, r. 7, as amended in 1920.
With respect, the question does not appear to have been fully argued before the Court, for the judgment does not discuss the question of construing the relevant provisions of 0. 45, r. 7 or of r. 9, of the Privy Council Rules, and indeed the earlier decisions of the Court on that point do not appear to have been cited either.
Even so, this decision was subsequently followed and that led to a consistent practice in the said High Court on which the learned judges have relied in rejecting the appellant 's application for extension of time in the present case.
In this connection it may be relevant.
to note that when this question was raised before the (1) I.L.R. [1956] Andhra 55.
(3) (5) (2) (4) (1883) L.R. 111 I. A. 7.
(6) 652 Calcutta High Court again in Akimuddin Chowdhury vs Fateh Chand Mahesri & Ors.
(1) Chief Justice Derbyshire was referred to the Full Bench decision of the Bombay High Court in Nilkanth Balwant Natu (2) in support of the argument that there was a jurisdiction to extend time for furnishing security, but he observed that though he had great respect for the said Full Bench decision there was a contrary decision of the Calcutta High Court in the case of Raj Kumar Govind Narayan Singh( ') and so he was bound to follow the said decision and conform to the practice prevailing in the Calcutta High Court.
In our opinion, the practice prevailing in the Calcutta High Court since the decision of Chief Justice Rankin in the case of Raj Kumar Govind Narayan Singh (3) is not justified either by the provisions of 0.
45, r. 7, of the Code or 0.
XII, r. 3, of the Supreme Court Rules.
We must accordingly hold that the High Court was in error in holding that it had no jurisdiction to entertain the application made by the appellants to extend time for furnishing the security.
On the view which it took the High Court naturally did not examine the merits of the appellants ' case that there were sufficient and cogent reasons for condoning the delay.
We would therefore allow the appeal, set aside the order passed by the High Court and remit the matter to that Court for disposal of the appellants ' application in accordance with law.
In the circumstances of this case there would be no order as to costs.
Appeal, allowed.
(1) [1939]44 C.W.N. 920.
(2) Bom. | On an application made by the appellant, the Calcutta High Court granted a certificate on May 18, 1956, enabling him to appeal to the Supreme Court against the judgment and decree of the High Court.
Under 0. 45, r. 7(1)(a), of the Code of Civil Procedure, 1908, the appellant had to deposit the security amount for costs of the respondent within ninety days or such further period, not exceeding sixty days, as the court may upon cause shown allow, from the date of the decree complained of, or within six weeks from the date of the grant of the certificate, whichever was the later date.
Being unable to deposit 644 the amount on the due date, the appellant filed an application on July 4, 1956, before the High Court praying that the amount tendered by him be accepted after condoning the delay, but the High Court rejected it on the ground that according to the uniform current of decisions of that Court it had no jurisdiction to extend the time for depositing the amount.
Held, that reading 0.
45" r. 7, of the Code of Civil Procedure, 1908, along with the other relevant provisions Of the said Order, a High Court has jurisdiction to extend time for furnishing security under the rule, and that the decisions of the Calcutta High Court to the contrary are erroneous.
Order XII, r. 3, of the Supreme Court Rules, 1950, expressly recognises and gives jurisdiction to the High Courts to extend the time for furnishing the security in a proper case.
Raja Kumar Govind Narayan Singh and others vs Shamlal Singh and others, 1 and Akimuddin Chowdhury vs Fateh Chand Mahesri & others, , disap proved.
Roy Jyotindranath Chowdhury & Ors.
vs Rai Prasanna Kumar Banerjee Bahadur, (1906) 11 C.W.N. I 104, Harendra Lal Choudhry vs Sm.
Hari Dasi Debei, , Nilkanth Balwant Natu & Ors.
vs Shri Satchidanand Vidya Narsinha Bharati & Ors., Bom.
430, Bishnath Singh & Ors.
vs Balwant Rao Naik Kalia & Ors., I.L.R. [1939] All 549, Ismail Piperdi vs Momin BiBi & Ors, , Lachmeshway Prasad Shukul vs Girdhari Lal Choudhuri, Pat. 123, Ghulam Rasul vs Ghulam Qutabud din, (1942) I.L.R.23 Lah.447, Gulam Hussain vs Mansurbeg & Ors., I.L.R. and Thota Pitchaiah Andhra 55, approved. |
minal Appeal No. 137 of 1967.
Appeal by special leave from the judgment and order dated May 9, 1967 of the Rajasthan High Court in section B. Criminal Appeal No. 254 of 1966.
Sobhag Mal Jain, for the appellants.
H. R. Khanna and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
The two appellants, in this appeal, by special leave, challenge their conviction, by the Additional Sessions Judge, No. 1, Jaipur City, for offences under sections 120B, 420, 420 read with 511, and 467 read with 471, I.P.C., as confirmed by the High Court of Rajasthan, at Jodhpur.
Bhanwar Singh has also been convicted, for an offence under section 380, I.P.C. Both of them have been sentenced to various terms of imprisonment and fine, for these offences, and the sentences of imprisonment have been directed to run concurrently.
The two appellants, along with two others, who have since been acquitted, were tried by the learned Sessions Judge, for various offences, as indicated below.
There was a common charge of criminal conspiracy, under section 120B, IPC, to do, or cause to be done, illegal acts, viz., offences of theft, cheating, forgeries, etc., against all the four accused.
Under this head, the allegation was that the four accused agreed, among themselves, to commit theft and pilferage, of Indian and British postal orders and bank cheques, belonging to different persons, which were in transmission, by post and that, after such pilfering, the names of the original payees and the names of the paying post offices were erased and forgery was committed by writing the names of fictitious persons, or the names of some of the accused, and of different post offices.
The further allegation was that the accused agreed to use, as genuine, all such pilfered and forged postal orders and cheques, which the accused knew, or had reasons to believe, were forged documents.
There was also an allegation that all the accused had also agreed to present, such pilfered and forged postal orders and cheques, for encashment at the post offices and banks at Ajmer and Jaipur, through the two appellants and Yasoda Devi, 4th accused, pretending to be either the original payees or the substituted payees.
It was further alleged that the accused had agreed to cheat, or attempt to cheat, the postal L2Sup.
CI/68 3 530 authorities and banks, at Ajmer and Jaipur, by dishonestly inducing them to make payment to the appellants and Yasoda Devi, in respect of the pilfered and forged postal orders and cheques.
It Was also stated that the accused committed the various acts, in pursuance of the agreement, regarding the postal orders and cheques, details of which were given under that charge.
Appellant Bhanwar Singh was also further charged that, in pursuance of the conspiracy, during October 1956 and December 1957, he committed theft of various postal orders and cheques, belonging to various persons and that he also forged certain postal orders, which were valuable securities, by removing the names of the original payees and inserting his own name and that he thereby cheated the postal authorities at Jaipur, by dishonestly inducing them to deliver certain amounts against such postal orders, which were really payable to a third party, and thereby he committed offences of theft, forgery and cheating, under sections 380, 467 and 420, I.P.C. There were also certain further charges, for offences punishable under section 471; and of an attempt to commit cheating in respect of a cheque, punishable under section 420 read with section 51 1, IPC.
Similarly, against Kishanlal, the 2nd appellant, there were additional charges, framed under sections 467, 420, 420 read with 511 and 471, I.P.C. Kapoorchand was also charged under sections 380 and 467 I.P.C., and Yasoda Devi, under sections 467, 471, 420 and 419 I.P.C. The case of the prosecution, in brief, was as follows.
Bhanwar Singh and Kapoorchand were constables in the C.I.D., Ajmer Zone, during 1956 57.
In the course of their duties of censoring postal mail, these two constables, after having opened the mail, for the purpose of censoring, pilfered certain Indian postal orders and British postal orders and cheques and, after erasing the names of the original payees, as also the names of the post offices or banks, where payment was to be made, inserted their own names or some fictitious names and got the postal orders or cheques encashed at different post officers and banks.
According to the prosecution, Bhanwar Singh and Kapoorchand had entered into a conspiracy, with Kishanlal and Yashoda Devi, whose services were utilised for getting the moneys from the Banks.
The matter came to light when the payees did not receive the cheques or the postal orders intended for them and lodged complaints with the post offices and banks.
On investigation, the four accused were charged, as detailed above.
The accused denied the charges levelled against them.
The learned Sessions Judge came to the conclusion that the charge of criminal conspiracy was established, against all the four accused The first appellant was found to be the main accused and he was 531 convicted under sections 380, 467/471, 420/511 read with section 120B I.P.C.
The second appellant and Yashoda Devi were convicted under sections 467, 471 and 420 read with section 120B IPC.
Kapoorchand was however convicted only for offences under sections 380 and 467 read with 120 B, IPC.
The learned Sessions Judge sentenced all of them to various terms of imprisonment, and fine, for the different offences, as stated already.
All the four accused challenged their conviction for these offences and the sentence passed against them, be before the High Court of Rajasthan.
Two contentions were raised by the accused; (i) that the trial held by the Sessions Judge was illegal and void, inasmuch as the prosecution had been conducted, without obtaining the necessary sanction, under section 196A of the Code of Criminal Procedure 1 in respect of the charge under sections 467 and 471 read with section 120B IPC; (ii) that the evidence adduced by the prosecution, did not establish the guilt of the accused.
Both these contentions have been negatived by the High Court, so far as the appellants herein are concerned.
The High Court, however, acquitted Yashoda Devi, holding that the prosecution evidence id not establish her guilt, beyond reasonable doubt.
The High Court also acquitted Kapoorchand holding that the trial against him was void, because the necessary sanction had not been obtained, under section 196A of the Code of Criminal Procedure.
On behalf of the appellants, Mr. Jain, learned counsel, raised the same two contentions before us.
Counsel urged that inasmuch as the accused were prosecuted for non cognizable offences under sections 467/471 read with section 120B, IPC., the trial was illegal and void, inasmuch as the necessary sanction, under section 196A of the Code had not been obtained.
Learned counsel further urged that the mere fact that the accused were also tried for the offence of cheat ing, under section 420 IPC, which is cognizable and for which punishment by way of imprisonment extending to 7 years could be imposed, and for which no sanction was necessary, would not make the trial valid.
Under such circumstances, the joint trial for cognizable and non cognizable offences was illegal and void.
Mr. Khanna, learned counsel for the State, met this conten tion, on behalf of the appellant, by pointing out that the main object of the conspiracy was to cheat the banks and the post offices, by obtaining money from them; the forgeries committed by the accused on the cheques and postal orders were only incidental to achieve the main object of the conspiracy, viz., to commit the offence under section 420 IPC.
Under those circumstances, Mr. Khanna pointed out, it was not necessary to obtain sanction under section 196A of the Code and therefore there was no illegality,.
which would vitiate the trial, held by the Sessions Judge.
532 We have already indicated the offences for which the appellants and the other two accused, who have since been acquitted, were tried.
It is enough to note that there was a charge under section 120B, read with section 467/471 and 420 IPC.
The offences under section 467 and 471 are non cognizable, but the offence under section 420 is a cognizable one for which the punishment could be imprisonment extending to 7 years.
Therefore, if the object of the conspiracy, under section 120B, was to commit a non cognizable offence, under section 467 or 471 I.P.C., the obtaining of sanction, from the authorities mentioned in sub section
(2) of section 196A, was absolutely necessary, and the absence of such sanction would vitiate the trial, for such offences.
Similarly, if the object of the conspiracy, under section 120B, was to commit a cognizable offence under section 420 IPC, which is punishable with imprisonment for a term above 2 years, no sanction is necessary, under section 196A.
The question is, whether sanction was necessary in the case before us, when there was a trial for offences under section 467/471 and 420 IPC, read with section 120B. In the instant case, it is admitted that no sanction was ob tained.
In The State of Andhra Pradesh vs Kandimalla Subbaiah(1) the question arose, before this Court, whether sanction under section 196A of the Code was necessary when there was a trial for offences under section 120B, read with sections 466, 467 and 420, IPC.
It was argued, on behalf of the State, that since the object of the conspiracy was to cheat the Government i.e., to commit an offence under section 420 IPC, and as the offences under sections 466 and 467 were only means to that end, the trial was not vitiated simply because no sanction was obtained for prosecuting the accused, for offences of criminal conspiracy to commit non cognizable offences, under sections 466 and 467 IPC.
But, in that decision, this Court did not express any opinion on this point, as the matter was sent back to the trial Court, for framing fresh charges and proceeding with the trial, after observing that it was for the Government to consider whether it should accord sanction for prosecution of non cognizable offences, assuming that such sanction was necessary.
The question, that was thus left open, in that decision, arises for consideration, now, in the instant case before us.
On behalf of the appellant, reliance has been placed on three decisions, in support of the contention that under such circumstances, the trial is illegal and void.
Those decisions are: Subbaiah, In re:(2), of the Andhra Pradesh High Court; Jadeda Meramanji vs State of Gujarat(3), of the Gujarat High Court; and Nibaran Chandra vs Emperor(4), of the Calcutta High Court.
(1) (3) (2) I.L.R. (4) A.I.R. 1929 Cal.
533 The decision of the Calcutta High Court does not assist the appellant, because the charge that was framed was of criminal conspiracy, under section 120B read with section 384 IPC.
The object of the conspiracy having been to commit an offence, under section 384 IPC, which is a non cognizable offence, it was held by the Calcutta High Court that the Magistrate could not take cognizance of the offence, without the necessary sanction, under section 196A; and, on this ground, the High Court held that the trial was void.
In the decisions of the Andhra Pradesh and Gujarat High Courts, referred to above, it has been held that in respect of a prosecution, for criminal conspiracy, under section 120B, read with es.
466 and 467 IPC., under which sections the offences are non cognizable, the consent, contemplated under section 196 (A) (2) is a pre requisite to any Court taking cognizance of that offence; it has also been held that sanction is not necessary to prosecute a case of criminal conspiracy to commit an offence under section 420 IPC.
The legal proposition, stated as such, is unexceptionable.
But it is not clear from the discussion, contained in the two judg ments, as to what was the object of the conspiracy.
It is also to be stated that the said two decisions had no occasion to consider the question whether sanction, under section 196 (A) (2), Cr.
P.C., is still necessary when a trial is held for offences under section 120B read with section 466, 467 and 420 IPC., and when the case of the prosecution is that the object of the conspiracy is to commit the offence of cheating, and non cognizable offences have been committed for the purpose of effecting the object of the conspiracy.
We may also point out that our attention has been drawn to the decision of this Court in Madan Lal vs State of Punjab (1).
We have gone through that decision and it does not, in our opinion, assist the appellant.
The view of the various High Courts, to which we will refer presently, and with which view we agree, is that no sanction is necessary, under section 196A(2) Cr.
P.C., when the object of the conspiracy is to commit the offence of cheating (420 IPC), but, forgery of documents (467 IPC) and similar non cognizable offences are also committed, as merely steps taken, by one or other of the accused, for the purpose of effecting the main object of the conspiracy.
A trial, under such circumstances, for offences under section 120B, read with section 467/471 and 420 IPC., without obtaining sanction, is neither illegal, nor void.
It is necessary to keep in mind the difference between the object of a conspiracy and the means adopted for realising that object.
Even if the object of the conspiracy, viz., of cheating, is (1) ; 534 sought to be attained by resort to non cognizable offences, as in the case before us, sanction under section 196A of the Code is not necessary.
This principle emerges from the following decisions: Ramaohandra Rango vs Emperor(1); Durgadas Tulsiram vs State(2); Abdul Kadar vs State(3); Paresh Nath vs Emperor(4); Golam Rahman vs The King(6); Kannan, In re(6); and Vadlamudi vs State of A.P. (7).
The object of the conspiracy has to be determined, not only by reference to the sections of the penal enactment, referred to in the charge, but on a reading of the charges themselves.
On a perusal of the charges, framed against the appellants, we are satisfied that the only object of the conspiracy was to cheat the banks or the post offices, referred to in the charges, which is an offence under section 420, read with section 120B, IPC, for which no sanction is necessary.
No doubt there are also charges of committing forgery Of valuable security and using such forged documents, which are ,offences under sections 467 and 471 IPC, and non cognizable.
But a reading of the charges, as a whole, makes it clear that it is not the case of the prosecution that committing forgery of the Indian and British postal orders or the cheques, or using such forged documents, was the object of the conspiracy.
The accused would not he satisfied by merely entering into a conspiracy to forge the postal orders or the cheques, or even to use such forged documents.
The forging of the documents and using such forged documents, were only means adopted by the accused for realising the object, of the conspiracy, which was to cheat the postal and bank authorities, at the places mentioned in the charge, by dishonestly inducing them to part with money.
Therefore the trial of these accused, for offences under sections 120B read with section 467/ 471 and 420 IPC., and other allied offences, cannot be held to be illegal, on the ground that sanction under section 196A(2) of the Code, had not been obtained.
Before closing the discussion, on this point, it is necessary to refer to the reliance placed, by the, counsel for the appellants, on the acquittal, by the High Court, of Kapoorchand, on the ground that the trial was void, because the necessary sanction had not been obtained, under section 196A, of the Code.
It will be seen that the said accused also was tried for an offence under section 120B read with section 420 IPC., as also on certain other charges.
As will be seen from the judgment of the High Court, it has taken the view that the said accused has not been convicted, by the trial Court, for an offence, under section 120B read with section 420 IPC., and hence the trial is vitiated, for lack of sanction.
(1)A.I.R. 1939 Bom.129.
(2) A.I.R. 1955 Bom.
(2)A.I.R. 1964 Rom.133.
(4) A.I.R. 1947 Cal.
(5)A.I.R. (6) (1949) 2 M.L.J. Short Notes (7)A.I.R. p. 52 (Crl.
M.P. 2686/1949) 535 Mr. Khanna, learned counsel for the respondent, has pointed out that the said accused was also tried for the offence of cheating, but he was convicted only for certain other offences; and, in this connection, he referred us to the finding of the trial Court that all the accused were guilty of the offence of cheating also.
It is not necessary to pursuematter further, because, it Will be seen from the judgment of the trial Court that the said accused was also prosecuted for anoffence under section 120 B read with section 420 IPC.
In view of what is stated above, the first contention of the learned counsel for the appellants, has to be rejected.
So far as the second contention is concerned, that really relates to merits.
Both the learned Sessions Judge, as well as the High ,Court, have very elaborately gone into the evidence regarding the appellants, and have found them guilty of the offences, for which they were punished.
We do not see any error, committed by the High Court, or the Sessions Judge, in the appreciation of the evidence, in the case, and there is no justification for any interference, by this Court.
The result is that the appeal fails, and is dismissed.
G.C. Appeal dismissed. | The appellants along with two others were charged with having entered into a criminal conspiracy in pursuance of which postal orders and cheques in the course of transit by post were pilfered and after various alterations being made therein were encashed at post offices and banks.
The charges inter alia were under sections 467/471 read with section 120 B and a. 420 read with section 120 B of the Indian Penal Code.
The Sessions Judge convicted all the four accused but the High Court maintained the conviction only of the two appellants.
In appeal before this Court the appellants urged that inasmuch as the accused were prosecuted for non cognizable offences under sections 467/471 read with section 120 B I.P.C. the trial was illegal and void as the necessary sanction under section 196 A(2) of the Code of Criminal Procedure had not been obtained.
It was further urged that the mere fact that the accused were also tried for the offence of cheating, under section 420 I.P.C. for which no sanction was required, would not make the trial valid.
Under these circumstances it was contended that the joint trial for cognizable and non cognizable offences was illegal and void.
HELD : It is necessary to keep in mind the difference between the object of a conspiracy and the means adopted for realising that object.
No sanction is necessary under section 196 A(2) Cr.
P.C. when the object of the conspiracy is to commit the offence of cheating (420 I.P.C.) but forgery of documents (467 I.P.C.) and similar non cognizable offences are also committed, as merely steps taken, by one or other of the a for the purpose of effecting the main object of the conspiracy.
[533 F H] The object of the conspiracy has to be determined, not only by reference to the sections of the penal enactment, referred to in the charge but on a reading of the charges themselves.
The charges against the appellants showed that the only object of the conspiracy was to cheat the banks or the post offices, referred to in the charges, which is an offence under section 420 read with section 120 B I.P.C. for which no sanction is necessary.
The forging of the documents and usuing such forged documents were only means adopted by the accused for realising the aforesaid object.
Therefore the trial of the accused in the present case for offences under sections 120 B read with sections 467/471 and 420 I.P.C. and other allied offences, cannot be held to be illegal on the ground that sanction under section 196 A(2) of the Criminal Procedure Code had not been obtained.
[534 B E] State of Andhra Pradesh vs Kandimala Subbaiah, Ramchandra Rango vs Emperor, A.I.R. 1939 Bom.
129, Durgadas Tulsiram vs State, A.I.R. 1955 Bom. 82, Abdul Kadar vs State, A.I.R. 1964 Bom.
133, Paresh Nath vs Emperor, A.I.R. 1947 Cal.
32, Golam Rahman 528 529 Notes p. 52 Vadlamudi vs State of A.P. A.I.R. 1961 A.P. 448, referred to.
Subbaiah, In re : I.L.R. , Jadeda Meramanji vs State of Gujarat, (1963)2 Cr. L.J. 713, Nibaran Chandra vs Emperor, A.I.R. 1929 Cal.
754 and Madan Lal vs State of Punjab, ; , distinguished. |
Appeal No. 1249 of 1967.
Appeal from the judgment and decree dated July 21, 1967 of the Delhi High Court in Regular First Appeal No. 166 D of 1965.
A.K. Sen, Rameshwar Nath, P. L. Vohra and Mahinder Narain, for the appellant.
Bishan Narain, Radhey Mohan Lal and Harbans Singh, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
This appeal arises out of a suit for ejectment instituted by a landlord against a tenant.
It is common case that the suit is governed by the provisions of ' the Delhi and Ajmer Rent Control Act, 1952 (Act No. 38 of 1952) hereinafter referred to as the Act.
The material provisions of section 13(1) of the, Act are as follows : "13.
(1) Notwithstanding anything to the contrary contained.
in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any Court in favour of the landlord against any tenant (including a tenant whose tenancy is terminated) : Provided that nothing in this sub section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied (b)that the tenant without obtaining the consent of the landlord in writing has, after the commencement of this Act, (i)sub let, assigned or otherwise parted with the possession of the whole or any part of the premises; or 550 (ii) used the premises for a purpose other than that for which they were let; or, (c) that the tenant without obtaining the consent of the landlord has before the commencement of this Act, (i)sub let, assigned or otherwise parted with the possession of, the whole or any part of the premises;, or (ii)used the premises for a purpose other than that for which they were let; or (k)that the tenant has, whether before or after the commencement of this Act, caused or permitted to be ,caused substantial damage to the premises, or notwithstanding previous notice has used or dealt 'with the premises in a manner contrary to any condition imposed on the landlord by the Government, or the Delhi Improvement Trust while giving him a lease of the land on which the premises are situated;" The respondent constructed the building known as the Hotel Imperial, New Delhi, on land leased to him by the Secretary of State for India in Council under a perpetual lease deed dated July 9, 1937.
By a deed dated August 18, 1939, he leased to the appellant the hotel premises together with fittings and furniture for a term of 20 years commencing on September 15, 1939.
On January 28, 1958, the respondent instituted the present suit alleging that in breach of the express conditions of the lease dated August .18, 1939, the appellant sub let portions of the premises and made unauthorised additions and alterations in the premises, that on such breaches he was entitled to determine the lease and he did so, by notice in writing dated January 6, 1958.
He claimed eviction of the appellant on the grounds mentioned in cls.
(b), (c) and (k) of the proviso to section 13(1) of the Act.
The appellant filed its written statement on April 3, 1958 denying most of the material allegations in the plaint.
The appellant also pleaded that the respondent had waived the breaches, if any, of the conditions of the lease by accepting rents with knowledge of such breaches and particularly by accepting rent on or about January 3, 1958.
On April 24, 1958, Sri P. L. Vohra, counsel for the appellant, made the following statement before the trial Court : "The plaintiff can seek ejectment of the defendant only under section 13 of Act 38 of 1952.
In case the 551 plaintiff succeeds in establishing the liability of, the defendant for ejectment on any of the grounds given in .section 13 of the Rent Act, the defendant would not seek any protection under the terms of the lease deed dated 18th August, 1939 executed between the parties, as regards the period of lease fixed therein.
" Having regard to the pleadings and statement of counsel, the Court settled the following issues on May 12, 1958 : "1.
Whether the defendant had sublet, assigned or otherwise parted with possession, of any part of the suit premises before the commencement of Act 38 of 1952 ? 2.
If so, was the same done with express or implied consent of the plaintiff ? 3.
Whether the defendant had sublet, assigned or otherwise parted with possession of any part of the suit premises after the commencement of Act 38 of 1952 ? 4.If so, was the same done with the prior consent in writing of the plaintiff ? 5.Whether the defendant has used the tenancy premises for a purpose other than that for which they were let ? 6.
Whether the defendant has caused substantial damage to the tenancy premises ? 7.
Whether the defendant notwithstanding previous notice has been.
using and dealing with the tenancy premises in a manner contrary to the conditions imposed on the plaintiff by, the Government while giving him lease of the site of the tenancy premises ? 8.
Is the defendant entitled to special cost ? 9.
Whether the plaintiff is estopped or has waived his right to seek ejectment of the defendant on any of the grounds mentioned above ? If so, what and to what effect ? 10.Whether the defendant is entitled to sublet any part of the hotel premises even when there was a clause to the contra in the lease dated the 18th August, 1939.
and in face of statutory provisions under the Rent Control Act (for reasons given in para 16 of the amended written statement) ?" A tenant holding premises under a subsisting lease is pro tected by the lease and needs no protection under the Rent Act.
It was open to the appellant to contend that it was protected by 552 the terms of the lease dated August 18, 1939, that the breaches, if any, of the conditions of the lease had been waived by the respondent and that the lease had not determined.
But the appellant deliberately elected to seek protection under section 13 of the Act only.
The appellant 's counsel made a ' formal statement in the trial Court that the appellant would not seek any protection under the terms of the lease deed as regards the period of the lease fixed therein.
The Court accordingly settled the ten issues.
Issue No. 8 was not pressed.
All the other issues relate to thegrounds of eviction mentioned in cls.
(b), (c) and (k) of theproviso to section 13(1) of the Act.
Issue No. 9 raises the question of waiver of the respondent 's right to seek ejectment on those grounds.
Thus, the only questions in issue between the parties was whether the appellant was entitled to protection from eviction under section 13 and whether any ground for eviction under the Act was made out.
The case was tried and decided on this footing.
We have come to this conclusion after a close examination of the 'pleadings, particulars, statement of counsel, issues and the judgment of the trial Court.
No issue was raised on the question whether the breaches of the express conditions of the lease had been waived by the respondent, and whether the lease was still subsisting.
The appellant sought to raise this plea in the High Court and also in this Court Having regard to the deliberate stand taken by the appellant in the trial Court, the appellant cannot be allowed to raise the plea at a later stage.
The lease determined by efflux of time on September 15, 1959.
Had the appellant taken the plea that the lease had not determined by forfeiture on the date of the institution of the suit, it is possible that the respondent might have filed another suit for ejectment of the appellant immediately after September 15, 1959.
Because of the stand taken by the appellant, it was not necessary for the respondent to file another suit.
This appeal must be decided on the footing that the lease had determined by forfeiture on the date of the institution of the present suit.
The respondent is entitled to a decree for eviction if any of the grounds mentioned in cls.
(b), (c) and (k) of the proviso to section 13(1) is made out.
The trial Court answered issue No. 5 in the negative.
With regard to all the other issues, the trial Court found in favour of the respondent, and held that the grounds of eviction mentioned in cls.
(b)(1), (c)(i) and (k) were proved.
With regard to the ground of eviction mentioned in cl.
(k), the trial Court held that the appellant was entitled to relief on certain conditions.
The trial Court, however, held that the respondent was entitled to an unconditional decree, for eviction on the ground of sub letting mentioned in cls.
(b)(i) and (c)(i).
The appellant preferred 553 an, appeal to the High Court.
The High Court agreed with all the findings of the trial Court, and dismissed the appeal.
The two Courts concurrently found that the appellant had sub let several rooms, counters, showcases and garages.
The two Courts found that the appellant had sub let rooms to (1) Pan American World Airways, (2) Mercury Travels, India (Private) Ltd., travel agents, (3) Indian Art Emporium, dealers in curios and jewellery, (4) Shanti Vijay and Co., dealers in jewellery, (5) Roy and James, hairdressers, (6) Sita World Travels, travel agents and (7) Ranee Silk Shop, dealers in saris and curios.
The businesses of the sub lessees were not confined to the residents of the hotel.
The letting to Pan American World Airways and Indian Art Emporium were before the commencement of the Act and the lettings to Mercury Travels, Shanti Vijay and Co., and Roy and James were after the commencement of the Act.
Sita Travels and Ranee Silk Shop were inducted as tenants after the institution of, the suit.
The entrances to the rooms were in ,the main corridor of the hotel on the ground floor.
The concurrent finding is that the occupants were given exclusive possession of the rooms occupied by them.
The appellant did not retain any control and dominion over the rooms.
It is possible that the keys of the apartments were sometimes left at the reception counter, but the evidence on this point was not convincing.
It was not a condition Of the grants that the keys would be left at the reception counter, or that the duplicate keys would be retained by the appellant.
The occupants were at liberty to take away the keys if they liked '.
The occupants availed themselves of the services of the hotel sweeper for, their own convenience.
The appellant retained control of the corridor, but it is common case before us that the entrance to the corridor was open day and night.
The occupants paid monthly sums to the appellant as the consideration of the sub leases.
The consideration though described as license fee was in reality rent.
The portion occupied by Roy and James has an interesting history.
It was formerly sub let to R. N., Kapoor.
In Associated Hotels of India Ltd. vs R. N. Kapoor(1), this Court held by a majority on a construction of the grant to R. N. Kapoor that he was a lessee and not a licensee.
Roy and James began to occupy this portion of the premises from February, 1955.
According to the appellant, the agreements with Roy and James, Mercury Travels and Shanti Vijay and Co., were in writing.
The appellant produced several documents in Court at an early stage of the suit.
The appellant 's case was that these documents were the relevant agreements.
According to the respondent, the documents were not genuine and the real agree (1) [196] 1 S.C.R. 36F 554 meats were being withheld.
The stamp auditor noted on the documents the deficiency in stamps and penalty leviable on them on the footing that they were lease deeds.
The appellant did not contest this note nor paid the penalty and deficiency as directed by the trial Court.
The surprising feature of the case is that the appellant did not attempt to prove any of the documents.
Where the agreement is in writing, it is a question of construction of the agreement whether the grant is a lease or a license.
It was for the appellant to prove the written agreements, and the Court could then construe them.
The appellant has not brought before the Court the best and the primary evidence of the terms on which the apartments were being occupied.
The onus to prove sub letting was on the respondent.
The respondent discharged the onus by leading evidence showing that the occupants were in exclusive possession of the apartments for valuable consideration.
The appellant chose not to rebut this prime facie evidence by proving and exhibiting the relevant agreements.
The documents formed part of the appellant 's case.
The appellant bad no right to withhold them from the scrutiny of the Court.
In the absence of the best evidence of the grants, the Courts below properly inferred sub lettings from the other materials on the record.
The test of exclusive possession, though not conclusive, is a very important indication in favour of tenancy, see Addiscombe Garden Estates Ltd. and Anr.
vs Crabbe and Ors.(1) The argument is that as the landlord is living in the premises, that fact raises the presumption that he intends to retain the control of the whole of the premises and that the occupation of the other parts is that of a lodger or inmate and not that of a tenant, and reliance was placed on Helman vs Horsham Assessment Committee(2) and the cases referred to therein.
Those cases consider what constitute rateable occupation.
In the case last cited, Denning, L. J. said that a person who is regarded as a lodger for rating purposes need not necessarily be a lodger for the purposes of the Rent Restriction Acts, while Evershed L.J. seems to have expressed a contrary opinion.
Normally, an occupier of an apartment in a hotel is in the position of a licensee as the hotel keeper retains the general control of the hotel including the apartment.
But it is not a necessary inference of law that the occupier of an apartment in a hotel is not a tenant.
Where, as in this case, the hotel keeper retains no control over the apart ment, the occupier is in the position of a tenant.
In Halsbury 's Laws of England, Vol. 23, article 1028, p. 433, the law is accurately summarised thus "A lodger who has no separate apartment is only a licensee, and, even though he has a separate apart (1) , 525.
(2) 555 ment, he has not in law an exclusive occupation, and is therefore in the position of a licensee, if the landlord retains the general control and dominion of the house, including the part occupied by the lodger; but, if in fact the landlord exercises no control over that part, the occupier is a tenant.
The occupier does not, however, become a lodger merely by reason of the fact that the landlord resides on the premises and retains control of the passages and staircases and other parts used in common.
" On the question whether the occupier of a separate apartment in a premises is a licensee or a tenant, the test is has the landlord retained control over the apartment ? The fact that the apartment is a room in a hotel may lead to the inference that the hotel keeper retains the general dominion of the en tire hotel including the apartment and that the occupier is in the position of a lodger or inmate.
But the inference is not a necessary inference of law.
Where, as in this case, the best evidence of the rant was withheld from the scrutiny of the Court, the inference was rightly drawn that the occupiers were tenants.
At the hearing of this appeal, the appellant moved an appli cation for reception of the documents as additional evidence.
The genuineness of the documents was disputed by the respondent.
In the Courts below, the appellant made no attempt to prove these documents.
We found no ground for directing a new trial.
Having regard to all these facts, we dismissed the application.
The hotel building constitutes premises within the meaning of section 2(g) of the Act. ' It is because the hotel building constitutes Premises that the appellant can claim protection from eviction under the Act.
A room in a hotel is a part of the hotel premises.
A sub letting of a room in a hotel in contravention of cls.
(b) and (c) of the proviso to section 13(1 ) is a ground for eviction under the Act.
Section 2(g) provides that 'premises ' does not include " a room in a hotel or lodging house.
" The sub lessee of a room in a hotel is, therefore, not a tenant and cannot claim protection under section 13 from eviction, nor can he ask for fixation of standard rent.
see Associated Hotels of India Ltd. vs R. N. Kapoor(1).
If the interest of the tenant of the hotel premises is determined, the sub tenant to whom a room in the hotel has been lawfully sublet becomes under s, 20 a direct tenant of the landlord, It may be that when the sub tenant of a room in a hotel becomes a direct tenant under section 20 he enjoys the protection of the Act because the room is no, longer a room in a hotel.
But that point does not arise and need not be decided.
Because a room in a hotel is not (1) ; 556 premises, it does not follow that the room is not a part of the hotel premises or that a sub letting of the room is not a contravention of cls.
(b) and (c) of the proviso to section 13(1).
The Courts below concurrently found that the sub lettings after the commencement of the Act were made without obtaining the consent of the landlord in writing, and the sub lettings before the commencement of the Act were made without obtaining the consent of the landlord either orally or in writing.
We are not inclined to interfere with this concurrent finding.
It is said that by the lease deed dated August 18, 1939 the respondent impliedly consented to this sub letting.
Clauses 21 .and 22 of the lease are in these terms "21.
That the lessee shall not be entitled to either transfer or sub lease the premises or any part thereof to any other party without the written consent of the lessor and on such transfer, both the transferee and the lessee shall be liable for the payment of rent to the lessor and responsible to deliver,possession of the building and equipments in the same condition as when taken.
22.That the lessee will use the premises only for the purpose of running a first class hotel.
" It is ,aid that for the purpose of running a first class hotel it was necessary to sub let the apartments.
It is impossible to accept the contention.
A hotel keeper may run a first class hotel without sub letting any part of it.
Clause 21 clearly provided that the lessee shall not sub lease the hotel premises or any part thereof.
In the teeth of cl. 21, it is impossible to read in cl. 22 an implied consent to sub letting.
Reliance is placed on the correspondence passed between the Land Development Officer, New Delhi and the respondent bet ween April 1948 and February 1949 for establishing that the respondent gave written consent to the sub lettings.
The Land and Development Officer was then complaining of the occupation of portions of the premises by Pan American World Airways and other persons.
By his letters dated November 4, 1948 and February 23, 1949, the respondent requested the Land and Development Officer to regularise the matter adding that in an first class hotels counters of air lines and show rooms of jewellery and curios were always provided.
These letter,.; do not amount to a consent in writing to sub lettings of portions of the hotel to the persons mentioned therein.
Moreover, the consent, if any, 'was to the sub lettings made before 1949 and not to the sub lettings made thereafter.
It is not possible to infer from these letters a general consent to all sub lettings.
557 It is argued that the respondent waived the requirement of consent to the sub letting.
Any subletting in breach of the provisions of cl.
(b) of the proviso to section 13 ( 1) is an offence punish able under section 44.
Assuming that the landlord can waive the requirement as to consent, it is not shown that the respondent waived it.
A waiver is an intentional relinquishment of a known right.
, There can be no waiver unless the person against whom the waiver is claimed had full knowledge of his rights and of facts enabling him to take effectual action for the enforcement of such rights.
See Dhanukdhari Singh vs Nathima Sahu(1).
It is said that the respondent knew of the sub lettings as he frequently visited the hotel.
It appears that he visited the hotel up to 1953 and he must have known of the occupation of R. N. Kapoor, Indian Art Emporium and Pan American World Airways.
But he came to know of the other lettings in January 1958 only.
Moreover, the precise nature of the grant was never communicated ,to the respondent.
The Courts below rightly held that the respondent did not waive his right to evict the appellant on the , rounds mentioned in cls.
(b) and (c) of the proviso to section 13 (1).
We are therefore satisfied that the respondent is entitled to evict the appellant on the ground of sub letting of the rooms.
The Courts below held that the appellant had also sublet several counters, show cases and garages to various persons.
We express no opinion on the question whether there was any sub letting of the counters, show cases and garages.
The sublettings of the rooms are sufficient grounds of eviction tinder cls.
(b) and (c) of the proviso to section 13(1).
Clause 2(v) of the head lease granted by the Government to the respondent provided that the respondent would not, without the previous consent in writing of the Chief Commissioner.
Delhi or a duly authorised officer, erect or suffer to be erected on any part of the demised premises any building other than the buildings erected there on the date of the lease.
The appellant had due notice of the conditions of the head lease.
Notwithstanding such previous notice, the appellant dealt with the premises in a manner contrary to the conditions imposed by cl. 2 (v).
The Courts below found that contrary to this condition, the appellant made several unauthorised constructions without obtaining the requisite consent.
To give one illustration, the appellant admittedly constructed a room 16 ft. 6 in X 19 ft. 6 in.
with R.C.C. slab and brick masonry walls.
This newly constructed room was let to Shanti Vijay and Co.
On the ground of unauthorised construction of this room alone it must be held that the appellant in contravention of cl.
(k) of the proviso to section 13 (1), notwithstanding previous notice, dealt with the premises in a manner contrary to (1) , 852.
558 a condition imposed on the respondent by the Government while ,giving him a lease of the land on which the premises are situated.
The notice of the conditions imposed by the head lease was sufficient notice for the purposes of cl.
The ground of eviction under cl.
(k) was thus made out.
The Courts below also held that the appellant caused substantial damage to the premises.
We express no opinion on it, and this question is left open.
It follows that the respondent is entitled to evict the appellant on the grounds mentioned in cls.
(b) (i), (c) (i) and (k) of the proviso to section 13(1).
In the result, the appeal is dismissed with costs.
The execution of the decree is stayed for a period of six months from today.
The appellant through Mr. A. K. Sen gives an undertaking that the appellant will hand over to the respondent, on the expiry of six months, vacant possession of the entire hotel premises except the portion in the possession of sub lessees.
Y.P. Appeal dismissed. | The respondent landlord of a hotel filed a suit for eviction of his tenant appellant under section 13(1) proviso (b) and (c) of the Delhi and Ajmer Rent Control Act, 1952 on the allegation that the appellant had sub let several rooms.
These occupants were doing business, which were not confined to the residents of the hotel.
The occupants were given ex clusive possession of the rooms occupied by them.
The appellant did not retain any control and dominion over these rooms.
It was not a condition of the grants that the keys would be left at the reception counter, or that the keys would be retained by the appellant.
The occupants were at liberty to take away the keys if they liked.
The occupants availed themselves of the services of the hotel sweeper for their own convenience.
The appellant retained control of the corridor, but the entrance to the corridor was open day and night.
The occupants paid monthly sums to the appellant as the consideration of the sub leases.
The appellanttenant denied the allegations and pleaded that the respondent landlord had waived the breaches, if any.
The suit was decreed which the High Court, in appeal maintained HELD : The landlord was entitled to the decree for eviction.
[558 B] On the question whether the occupier of a separate apartment in a premises is a licensee or a tenant, the test is has the landlord retained control over, the apartment Normally, an occupier of an apartment in a hotel is in the position of licensee as the hotel keeper retains the general control of the hotel including the apartment.
But it is not a necessary inference of law that the occupier of an apartment in a hotel is not a tenant.
A hotel keeper may run a first class hotel without sub letting any part of it.
Where as in this case, the hotel keeper retained no control over the apartment, the occupier was in the position of a tenant.
The onus to prove sub letting was on the respondent.
The respondent discharged the onus by leading evidence showing that the occupants were in exclusive possession of the apartments for valuable consideration.
The appellant chose not to rebut this prima facie evidence by proving and exhibiting the relevant agreements.
[553 D; 554 C D, F H; 555 C; 556 E] Under section 2(g) "premises" does not include " a room in a hotel or lodging house".
The sub lessee of a room in a hotel is, therefore, not a tenant and cannot claim protection under section 13 from eviction, nor can he ask for fixation of standard rent.
But, because a room in a hotel is not premises, it does not follow that the room is not a part of the hotel premises or that a sub letting of the room is not a contravention of cls.
(b) and (c) of the proviso to section 13(1).
[555 F G 556 A] Associated Hotels of India Ltd. vs R. N. Kapoor, [1960]1 S.C.R. 368, followed.
Addiscombe Garden Estates Ltd. & Anr.
vs Grabbe and Ors.
and Helman vs Horsham Assessment Committee, [1949] 2 K.B. 335,referred to.
549 A waiver is an intentional relinquishment of a known right.
There can be no waiver unless the person against whom the waiver is claimed had full knowledge of his rights and of facts enabling him to take effectual action for the enforcement of such rights.
Assuming that the landlord can waive the requirement as to consent, it was not shown that the respondent waived it.
It is said that the respondent knew of the sub lettings as be frequently visited the hotel up to 1953 and he must have known of the occupation of some of the occupants.
But he came to know of the other lettings in 1958 only.
Moreover, the precise nature of the grant was never communicated to the respondent.
[557 B D] Dhanukdhari Singh vs Nathima Sahu, , referred to. |
Appeal No. 781 of 1964.
Appeal from the judgment and decree dated September 6, 1961 of the Punjab High Court in Regular Second Appeal No. 54 of 1960.
N. section Bindra, Kartar Singh Suri, Champat Rai and E. C. Agrawala, for the appellants.
section P. Sinha, section K. Mehta and K. L. Mehta, for respondents Nos. 1, 3, 5 and 6.
Bishan Narain, section K. Mehta and K. L. Mehta, for respondent No. 4.
The Judgment of the Court was delivered by Ramaswami, J.
The question to be considered in this appeal is whether under the customary law applicable to Sidhu Jats of Muktsar Tahsil of Ferozepore district collaterals of the 5th degree of the deceased land owner could take precedence over his married daughters in succession to his non ancestral property.
The dispute relates to 1574 kanals 4 marlas of land situated in village Kotli Ablu, Muktsar Tahsil of Ferozepore district.
Dulla Singh was the last male holder of the land and he was succeeded by his widow, Smt.
Indi on his death.
Indi died on September 8, 1955 and thereafter the estate was mutated by the revenue authorities on February 1, 1956 in favour of the defendants who were the reversioners of her husband in the 5th degree.
Nihal Kaur is the daughter of Dulla Singh.
On November 14, 1957 she instituted the suit which is the subject matter of the present appeal in the court of Subordinate Judge, Muktsar for a declaration that she was the legal heir of the land left by Smt.
Indi and that 653 she was entitled to inherit the estate to the exclusion of the collaterals.
The suit was resisted by the defendants who claimed that the whole of the land was ancestral and they were preferential heirs to the deceased Dulla Singh than the plaintiff.
The trial court held that the land in dispute was not the ancestral property of Dulla Singh, but the defendants who were 5th degree collaterals of Dulla Singh were entitled to exclude his daughter from succession even to the non ancestral property under the custom of the district.
Accordingly the trial court dismissed the suit of the plaintiff.
The decree was affirmed by the Additional District Judge, Ferozepore in appeal.
Nihal Kaur preferred a Second Appeal to the Punjab High Court which was allowed and the suit of the plaintiff was decreed.
The High Court took the view that the general custom of the Punjab as laid down in Rattigan 's Customary Law was that the daughters excluded collaterals for succession to the self acquired property of their father and the special custom set out in the Riwaj i am that the agnates, however, remote, exclude daughters from succession to their father 's property was opposed to the general custom referred to above and the Riwaj i am was only a presumptive evidence in favour of the collaterals and the presumption has been rebutted by the plaintiff Mst.
Nihal Kaur in the circumstances of the present case.
In other words, the High Court, held that the general custom in favour of the daughter 's succession prevailed and the defendants had not been able to prove that the general custom had been varied by a special custom enabling the collaterals to exclude the daughters.
This appeal is brought by the defendants on a certificate from the judgment of the Punjab High, Court dated September 6, 1961 in Regular Second Appeal No. 54 of 1960.
On the question of custom the respondents relied upon the statements in paragraph 23 of Rattigan 's Digest of Customary Law (14th Edn.), a book of unquestioned authority in the Punjab, State.
In para 23, p. 132 it is stated that (1) a daughter only succeeds to the ancestral landed property of her father, if an agriculturist, in default : (1) of the heirs mentioned in the preceding paragraph (viz., male lineal descendants, widow or mother), or (2) of near male collaterals of her father, provided that a married daughter sometimes excludes near male collaterals in certain circumstances specified in the paragraph, (2) But in regard to the acquired property of her father, the daughter is preferred to collaterals.
It is further stated at p. 152 that "the general custom of Punjab is that a daughter excludes collaterals in succession to self acquired property of her father and the initial onus, therefore, is on the collaterals to show that the general custom in favour of the daughter 's succession to the self acquired property of her father, has been varied by a special custom 654 excluding daughters".
This being the legal position of the parties the question arises whether the defendants had discharged the onus ,of proving the existence of a special custom excluding the daughters.
On this point the appellants relied upon the answers to ,Questions 48 and 49 in the Compilation of the Customary Law of Ferozepore district by M.M.L. Currie, Settlement Officer.
These ,questions and answers are comprised in the Riwaj i am of the settlement of Ferozepore district of 1914 and are reproduced below : " Question 48 Under what circumstances are daughters entitled to inherit ? Are they excluded by the sons or near male kindreds of the deceased ? If they are excluded by the near male kindred, is there any fixed limit of relationship within which such near male kindred must stand towards the deceased in order to exclude his daughter ? If so, how is the limit ascertained? If this depends on descent from a common ancestor, state within how many generations relatively to the deceased such common ancestor must come? Answer At last settlement Mr. Francis wrote "Except a few Sayyads all tribes say that a daughter can never succeed.
Some Sayyads say that an unmarried daughter can succeed like a son; but no instances are given. ' The custom has now changed completely, most tribes admitting that a daughter is entitled to succeed till marriage in the absence of a widow or male lineal descendants.
The following groups, however, do not admit that a daughter can succeed : Dogars of Fazilka, Nipals, Sayyads of Ferozepore, Zira and Muktsar, Bodlas (unless there are no collaterals in the 5th degree), ,Chishtis (unless no collaterals in the 7th degree), Pathans of Ferozepore (except the Kasuria group), Rajputs of Fazilka, Wattus of Zira and Fazilka, Moghals except in Ferozepore, Mahtams, Sodhis, Bagri Jats, Kumhars and Suthars, Bishnois and the following Jat Sikhs in Fazilka Tahsil Dhaliwals, Sidhhus, Gils and Sandhus.
The Kasuria Pathans state that a daughter succeeds if there are no sons, and the Arians state that she excludes collaterals who do not come within the 4th degree.
Question 49 Is there any distinction as to the rights of daughters to inherit (i) the immovable or ancestral, (ii) the movable or acquired property of their father ? 655 Answer There is no distinction.
A father can of course gift his movable or acquired property to his daughter.
" In the present case, there is no proof of any instance for or against the right of inheritance of a daughter of a deceased last male holder of the, Sidhu tribe of Jats, either in the Muktsar Tahsil or in the whole district of Ferozepore.
At least, none was brought to the notice of the lower courts by the plaintiff or the defendants.
It was contended on behalf of the appellants that the Riwaj i am of 1914 was entitled to a presumption as to the existence of a custom even though not supported by proof of instances and it must therefore be held that the defendants have discharged the initial onus of proving that the general custom has been varied by a special custom enabling them to exclude the married daughter.
The real controversy in this appeal is, however, on the question whether the entries in the Riwaj i am on which the defendants rely refer at all to non ancestral property or not.
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 land, the rule laid down could only be taken to apply to ancestral property.
This case related to property in Ferozepore district, though with regard to a different tehsil and different sub caste of Jats, but the important point is that the questions of the Riwaj i am of 1878 in that case were exactly in the same language as questions 48 and 49 of the Riwaj i am of 1914.
A similar view was taken by Shadilal and Wilberforce, JJ.
in Budhi Prakash vs Chandra Bhan(2).
The view was followed by other judges of the Lahore High Court in Narain vs Mst.
Gaindo(3), and Fatima Bibi vs Shah Nawaz ( 4 ) .
In Abdul Rahman vs Mst.
Natho(5) it was observed by the High Court as follows : " According to the Customary Law of the district, collaterals within the fifth degree exclude daughters, but it has been consistently held by this Court that Riwaj i am refer only to ancestral land unless there is a clear statement to the contrary.
It is unnecessary to refer to the numerous decisions on this point.
Customary law is in fact usually only concerned with protecting ancestral property, while self acquired property can be disposed of as the owner pleases, that is, reversioners are usually concerned only with property ancestral qua them." (1) A.I.R. 1916 Lah. 343.
(2) A.I.R. 1918 Lah.
(3) A.I.R. 1918 Lah.
(4) A.T.R. 1921 Lab.
(5) I.L.R. 656 The decision of this case was affirmed by the Full Bench of the Lahore High Court in Mst.
Hurmate vs Hoshiaru(l).
Din Mohammad, J. delivering the leading judgment in this case,, observed as follows : "In my view, the raison d ' etre 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 Abdul Rehman vs Mst.
Natho ( 2 ) 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 maleholder 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 specifically 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 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.
" The decision of the Full Bench of the Lahore High Court was approved by the Judicial Committee in Mst.
Subhani vs Nawab and Ors.(3) in which the controversy arose with regard to the interpretation of questions 16 and 17 and the answers thereto in Wilson 's Manual of Customary Law which are reproduced below "Question 16 (p. 48) Under what circumstances are daughters entitled to inherit ? Are they excluded by the sons or by the widow, or by the near male kindred of the, deceased ? If they are excluded by the near male kindred, is there any fixed limit of relationship within which such near kindred must stand towards the deceased in order to exclude his daughters ? If so, how is the limit ascertained ? If it depends on descent from a common ancestor, state within how many generations relatively to the deceased such common ancestor must come.
(1) I.L.R. I.L.R. (3) 68 I. A. 1. 657 Answer 16 All Musalmans.
A married daughter in no case inherits her father 's estate or any share in it.
An unmarried daughter succeeds to no share in presence of agnate descendants of the deceased, or of her own mother; but if there be no agnate descendants and no sonless widow, the un married daughters succeed in equal shares to the whole of their father 's property, movable and immovable, till their marriage, when it reverts to the agnate heirs.
If there be a widow and daughters of another wife who has died, the unmarried daughters of the deceased wife succeed to their mother 's share till their marriage.
Question 17 (p. 49) Is there any distinction as to the rights of daughters to inherit (1) the immovable or ancestral, (2) the movable or acquired, property of their father? Answer 1.7 All Musalmans.
As regards the right of the daughter to inherit, no distinction is made between the movable and immovable ancestral and acquired, property of the father.
If she inherits at all she takes the, whole estate.
" It was held by the Judicial Committee that though in the answers to question No. 17 in Wilson 's Manual no distinction was made between ancestral and non ancestral or between movable and immovable property, and the rule was stated as a wide generalization (in answer to question No. 16) that a married daughter in no case inherits her father 's estate or any share in it, it must be taken in view of the numerous decisions of the Punjab courts that the Riwaj i am which states the rule in such wide and general terms governs ancestral property only.
It should be noticed that Questions 16 and IT of the Wilson 's Manual are couched in similar language to Questions 48 and 49 of the Riwaj i ani with which we are concerned in the present appeal.
In view of these authorities we have therefore come to the conclusion that the entries in the Riwaj i ani with regard to Questions 48 and 49 on which the appellants rely do not refer at all to non ancestral property and are therefore not relevant evidence to establish a special custom among the Sidhu Jats of Muktsar Tahsil of Ferozepore district entitling collaterals for succession to non ancestral property in preference to daughters.
It follows therefore that the appellants have not discharged the onus which lay upon them of proving that the general custom has been varied by a special customs enabling the collaterals to exclude the daughters.
It is manifest therefore that the customary law among the Sidhu Jats of Muktsar Tahsil of Ferozepore district as regards non ancestral property is the same 658 as recorded generally for the State of Punjab in paragraph 23 of Rattigan 's Digest i.e., a daughter is preferred to collaterals.
We shall, however, assume in favour of the appellants that Questions 48 and 49 of the Riwaj i am relate also to succession of non ancestral property of the last male holder.
Even upon that assumption we are of opinion that the case of the appellants cannot succeed.
The reason is that though the entries in the Riwaj i am are entitled to an initial presumption in favour of their correctness, the quantum of evidence necessary to rebut this presumption would vary with the facts and circumstances of each parti cular case.
Where, for instance, the Riwaj i am laid down a custom in consonance with the general agricultural custom of the State, very strong proof would be required to displace this presumption, but where, on the other hand, this was not the case, and the custom as recorded in the Riwaj i am was opposed to the rules generally prevalent, the presumption would be considerably weakened.
Likewise, where the Riwaj i am affected adversely the rights of females who had no opportunity whatever of appearig before the revenue authorities, the presumption would be weaker still, and very little evidence would suffice to rebut it.
In Narain vs Mst.
Deoki(l), Roe, J. stated as follows : "There is no doubt a general tendency of the stronger to over ride the weak, and many instances may occur of the males of a family depriving females of rights to which the latter are legally entitled.
Such instances may be followed so generally as to establish a custom, even though the origin of the custom were usurpation; but the Courts are bound carefully to watch over the rights of the weaker party, and to refuse to hold that they had ceased to exist unless a custom against them is most clearly established".
In a later case, Sayad Rahim Shah vs Sayad Hussain Shah (2) a similar caution was uttered by Robertson, J. who observed as follows: "The male relations, in many cases at least, have been clearly more concerned for their own advantage than for the security of the rights of widows and 'other female relatives with rights or alleged rights over family property, and the statements of the male relatives in such matters have to be taken cum grano salis where they tend to minimize the rights of others and to extend their own.
(1) (1893) 24 P R. 124.
(2) (1901) 102 P.R. 353.
6 5 9 The same view was expressed by the Lahore High Court in a still later case Bholi vs Man Singh(1) where the Riwaj i am had laid down that daughters were excluded by collaterals, even up to the tenth degree and it was stated as follows: "As the land is rising in value under British rule, the land holders are becoming more and more anxious to exclude female succession.
They are ready to state the rule against daughters as strongly as possible, but if the custom is so well established, it is strange that they are unable to state a single instance in point on an occasion like the compilation of the Riwaj i am, when detailed inquiries are being made and when the leading men are supposed to give their answers with deliberation and care.
" The principle was reiterated by this Court in Mahant Salig Ram vs Mst.
Maya Debi(2) It was pointed out in that case that it was well settled that the general custom of the Punjab State was that the daughter excluded collaterals from succession to self acquired property of her father and so the initial onus must therefore be on the collaterals to show that the general custom in favour of the daughter 's succession to the self acquired property of her father has been varied by a special custom excluding the daughter.
It was also well settled that the entries in the Riwaj i am are entitled to an initial presumption in favour of their correctness but the presumption will be considerably weak ened if it adversely affects the rights of the females who have no opportunity of appearing before the Revenue authorities.
In the present case, apart from the general custom of the Punjab to which due weight must be attached three instances have been referred by the High Court in the course of its judgment to show that the presumption attaching to Riwaj i am has been rebutted in this case.
The first instance is the subject matter of the decision in Mst.
Rai Kaur vs Talok Singh(3).
It was a case of Gill Jats from Zira Tahsil of Ferozepore district.
It was held in that case that the plaintiffs on whom the onus rested had failed to prove that by custom among Gill Jats of mauza Lohara, tahsil Zira, district Ferozepore, they, as near collaterals of a deceased sonless proprietor, succeeded to his self acquired estate in preference to a daughter.
As we have already pointed out earlier, Questions 48 and 49 correspond to Questions 1 and 2 of the Riwaj i am of 1878 which were dealt with in this case.
The second instance is reported as Ratta vs Mst.
Jai Kaur(4).
It is case of a Daliwal Jat of Tahsil Moga, District Ferozepore.
It was admitted that daughter of the last male holder was entitled to succeed to his self acquired property.
It is true that the case (1) (1908) 86 P.R. 402.
(3) A.T.R. L2 SupCI/68 12 (2) [1955]1 S.C.R. 1191.
(4) 660 was decided upon the admission of Counsel for the collaterals but it is improbable that if there was material evidence in support of the collaterals the Counsel would have made such an admission.
The third instance referred to by the High Court is R.F.A. No. 220 of 1954, decided on April 11, 1961, in which it was held that sister of the last male holder excludes his collaterals from inheritance in regard to his non ancestral or acquired property.
That is a case of Jats from Fazilka tahsil of Ferozepore district.
The property, however, was situated in two villages, one in Fazilka tahsil and the other in Muktsar tahsil.
It was held in that case that in Muktsar and in Fazilka in regard to non ancestral or acquired property of the last male holder his sister was a preferential successor as against collaterals.
In this connection it should be noticed that in the Riwaj i am of 1914 Question 58 concerns the rights of succession of sisters and sisters ' sons and the answer is that they never inherit.
Considering therefore that in the neighbouring tahsils of the same district in regard to non ancestral property a daughter has excluded collaterals and in Muktsar tahsil a sister has excluded collaterals, there is in our opinion sufficient material to displace the presumption of correctness of the Riwaj i am entries in this case.
In view of the considerations already mentioned in the judgment the presumption attaching to the Riwaj i am entries is a weak presumption and in our opinion it has been sufficiently discharged by the evidence adduced by the respondents in this case.
It is necessary to add that the appellants defendants have not relied upon any instances in support of their case.
For the reasons expressed we hold that the judgment of the High Court dated September 6, 1961 in Regular Second Appeal No. 54 of 1960 is correct and this appeal must be dismissed with costs. | D, a Sidhu Jat of Muktsar Tahsil, Ferozepore District, Punjab was tile last male holder of certain land in that area.
He was succeeded by his widow after whose death, the land was mutated in favour of D 's collaterals in the 5th degree.
D 's daughter filed a suit for a declaration that she was the legal heir of .he land and was entitled to inherit to the exclusion of the collaterals.
The trial court held that the land was not ancestral but the defendants were preferential heirs under the custom of the district.
The decree was affirmed by the first appellate court.
In second appeal, however, the High Court decided in favour of the plaintiff holding that the general custom recorded in Rattigan 's Digest had not been shown to be displaced by any special custom in the Riwaj i am, The defendants appealed.
HELD : The entries in the Riwaj i am on which the appellants relied, did not refer at all to non ancestral property and were therefore not relevant evidence to establish a special custom among the Sidhu jats of Muktsar Tahsil of Ferozepore District entitling collaterals for succession to non ancestral property in preference to daughters.
The appellants had not discharged the onus which lay upon them of proving that the general custom had been varied by a special custom enabling the collaterals to exclude the daughters.
It was manifest therefore that the customary law among the Sidhu Jats of Muktsar Tahsil of Ferozepore district Is regards non ancestral property was the same as recorded generally for the State of Punjab in Paragraph 23 of Rattigan 's Digest i.e. a daughter is preferred to collaterals.
[657 G H] Mst.
Rai Kaur vs Talok Singh, A.I.R. 1916 Lab. 343, Budhi Prakash vs Chandra Bhan, A.I.R. 1918 Lab.
225, Narain vs Mst.
Gaindo, A.I.R. 1918 Lab.
304, Fatima Bibi vs Shah Nawaz.
A.I.R. 1921 Lab.
180, Abdul Rahiman vs Mst.
Natho, I.L.R. [1932] 13 Lab.
458, Mst.
Hurmate vs Hoshiaru, I.L.R. 25 Lab.
228 and Mst.
Subhani vs Nawab and Ors.
, 68 I.A. 1, referred to.
(ii) Even on the assumption that the Riwaj i am entries referred to the non ancestral property of the last male holder the appellants could not succeed.
For though the entries in the Riwaj i am are entitled to an initial presumption in favour of their correctness, the quantum of evidence necessary to rebut this presumption would vary with the facts and circumstances of each particular case.
Where, for instance, the Riwaj i am laid down a custom in consonance with the general agricultural custom of the State, very strong proof would be required to displace this presumption, but where, on the & her hand, this was not the case, and the custom as recorded in the Riwaj i am was opposed to the rules generally 652 prevalent the presumption would be considerably weakened.
Likewise, when the Riwaj i am affected adversely the rights of females who had no opportunity whatever of appearing before the revenue authorities, the presumption would be weaker still, and very little evidence would suffice to rebut it.
[658 B D] Har Narain vs Mst.
Deoki, (1893) 24.
P.R. 124.
Sayad Rahim Shah vs Sayad Hussain Shah, (1901) 102 P. R. 353, Bholi vs Man Singh, ( 1908) 86 P. R. 402 and Mahant Salig Ram vs Mst.
Maya Devi , referred to.
(iii)In.
the present case the High Court bid mentioned three instances in its judgment which showed that the presumption attaching to Riwaj i am had been rebutted in this case.
The appellant 's defendants had not relied upon any instances in support of their case.
The High Court therefore rightly decided in favour of the plaintiffs.
[660 C D] Mst.
Rai Kaur vs Talok Singh, A.I.R. 1916 Lah.
343, Ratta vs Mst Jai Kaur, and R.F.A. No. 220 of 1954 decided by the Punjab High Court on April 11 1961, referred to. |
ivil Appeals Nos.
1148, 1656 and 2341 of 1966.
Appeals by special leave from the judgment and decree dated July 27, 1965 of the Punjab High Court in Letters Patent Appeals Nos.
13 to 15 of 1965.
Prem Chand Jain and Janardan Sharma, for the appellants (in all the appeals).
D.D. Sharma, for respondents Nos. 1 (iv to xiii) in all the appeals).
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by special leave on behalf of the defendants against the judgment of the Punjab High Court dated 27th July, 1965 in Letters Patent Appeals Nos. 13 and 14 of 1965.
Dhara Singh, respondent No. 2, executed three sale deeds with regard to lands at village Bhadani, 'Tehsil Jhajjar, Rohtak in favour of the appellants in all the three appeals.
The first sale was of land measuring 27 kanals and 4 marlas dated September 20, 1960, the second was of land measuring 36 kanals and 19 marlas dated November 23, 1960 and the third was of land measuring 33 kanals and 18 marlas dated March 6, 1961.
Neki deceased, who was the father 's brother of Dhara Singh, vendor, instituted three suits in the court of Subordinate Judge at Jhajjar for possession of the aforesaid lands covered by the three sales on the ground that he had a superior right of pre emption on the basis of his relationship with the vendor as against the appellants under section 15(1)(a) of the Punjab Pre emption Act, 1913 (Punjab Act 1 of 1913).
These suits were contested by the appellants.
After hearing the contentions of the rival parties, the Subordinate Judge granted decrees in ail the three suits in favour of the plaintiffs.
In suit No. 311 of 1961 the decree stipulated that the plaintiff should deposit the amount of Rs. 3,500/ in court on or before 15 1 1963.
In suit Nos. 368 and 369 of 1961 the condition was that the plaintiffs should make the deposit of Rs. 5,000/ and Rs. 7,000/ respectively in court on or before 15 1 1963.
The appellants took the matter in appeal before the Senior Subordinate Judge who by his judgment dated 30th January, 1963 dismissed the appeals against the decrees in 835 suits Nos. 313 and 369 of 1961 and modified the decree in suit No. 368 of 1961 to the extent that the plaintiff was called upon to deposit a further sum of Rs. 2,000/ on or before 1 3 1963.
The appellants preferred regular Second Appeals Nos. 280, 281 and 282 of 1963 in the High Court against the decrees and judgment of the Senior Subordinate Judge, Rohtak.
The plaintiffs also preferred in the High Court appeal No. 830 of 1963 against the increase made in the price of the land by the Senior Subordinate Judge Rohtak in the appeal arising out, of decree in suit No. 368 of 1961.
While the appeals were pending in the High Court, Neki plaintiff died on April 7, 1963.
After his death, the appellants vendors in the three regular appeals moved applications under 0.22, r. I of the Civil Procedure Code to bring on record of the appeals the legal representatives of Neki, deceased plaintiff, namely, Dhara Singh, Ramkishan and Balbir Singh.
All the four appeals were heard and dismissed by Mr. Justice Khanna by his judgment dated 17th September, 1964.
The appellants preferred appeals under the Letters Patent which were dismissed by a Division Bench of the Punjab High Court by a common judgment dated 27th July, 1965.
The claim of Neki for pre emption was based on sections 14 and 15 (1) (a) of the Punjab Pre emption Act 1913 (Punjab Act 1 of 1913).
Section 14 states : "No person other than a person who was at the date of sale a member of an agricultural tribe in the the same group of agricultural tribes as the vendor shall have a right of pre emption in respect of agricultural land sold by a member of an agricultural tribe".
"Section 15 (I) (a) reads as follows "The right of pre emption in respect of agricultural land and village immovable property shall vest (a) where the sale is by a sole owner: FIRST, in the son or daughter or son 's son or daughter 's son of the vendor; SECONDLY, in the brother or brother 's son of the vendor; THIRDLY, in the father 's brother or father 's brother 's son of the vendor; FOURTHLY, in the tenant who holds under tenancy of the vendor the land or property sold or a part thereof .
" The Punjab Pre emption Act, 1913 was amended by Punjab Act 10 of 1960 and section 6 of the amending Act inserted a new section 31 in the Principal which states as follows: 836 "No court shall pass a decree in a suit for pre emption whether instituted before or after the commencement of the Punjab Pre emption (Amendment) Act, 1960, which is inconsistent with the provisions of the said Act".
It is necessary also to refer at this stage to the provisions of 0.22, r.1 and 0.22, r. 1 1 which are to the following effect : "0.22, r. 1 : The death of a plaintiff or defendant shall not cause the suit to abate if the right to sue survives".
"0.22, r.
I I : In the application of this Order to appeals, so far as may be, the word 'plaintiff ' shall be held to include an appellant the word 'defendant ' a respondent, and the word 'suit an appeal".
In support of these appeals, learned counsel put forward the argument that the right of pre emption claimed by Neki deceased plaintiff was a personal right which died with him upon his death and the legal representatives of Neki were not entitled to be granted a decree for pre emption.
The argument was that the statutory right of pre emption under the Punjab Act was not a heritable right and no decree for pre emption should have been passed by the lower court in favour of ',he legal representatives as representing the estate of Neki.
We are unable to accept the argument put forward by the appellants.
It is not correct to say that the right of pre emption is a personal right on the part of the pre emptor to get the re transfer of the property from the vendee who has already become the owner of the same.
It is true that the right of pre emption becomes enforceable only when there is a sale but the right exists antecedently to the sale, the foundation of the right being the avoidance of the inconveniences and disturbances which would arise from the introduction of a stran (Ter into the land.
The correct legal position is that the statutory law of pre emption imposes a limitation or disability upon the ownership of a property to the extent 'that it restricts the owner 's right of sale and compels him to sell the property to the person entitled to pre emption under the statute.
In other words, the statutory right of pre emption though not amounting to an interest in the land is a right which attaches to the land and which can be enforced against a purchaser by the person entitled to pre empt.
In the present case, Neki obtained decrees for pre emption in all the three suits against the appellants and these decrees were confirmed by the first appellate Court.
While the second appeals were pending in the High Court, Neki died and the question is whether under the provisions of 0.22, r. I and 0.22, r. I I of the Code of Civil Procedure, the right to sue survived after the death of Neki.
In this context, it is necessary to consider the provisions of section 306 of the Indian 837 Succession Act XXIX of 1925.
This section expresses a qualification of the maxim actio personalis mortiur cum persona to the extent that the section indicates that, amongst causes of action which survive, are included some actions of a personal nature, that is to say personal actions other than those expressly excluded by the section itself.
It is true that the right of pre emption under section 15(1)(a) of the Punjab Act of 1913 is a personal right in the sense that the claim of the pre emptor depends upon the nature of his relationship with the vendor.
But under section 14 of the Act, the pre emptor must be a member of an agricultural tribe in the same group of agricultural tribes as the vendor and the land of which pre emption is sought must be in respect of agricultural land sold to a member of the agricultural tribe.
We are of opinion that if an involuntary transfer takes place by inheritance the successor to the land takes the whole bundle of the rights which go with the land including the right of pre emption.
The view which we have taken is supported by the language of section 306 of the Indian Succession Act and it follows therefore that the claim of Neki for pre emption did not abate upon his death and that the legal representatives of Neki were properly brought on record of the second appeals under the provisions of 0.22, r. 1 read with 0.22, r. 10 of the Code of Civil Procedure.
The view that we have expressed is borne out by a decision of the Punjab High Court in Faqir Ali Shah vs Ram Kishan & Ors.(1).
The question that arose for determination in that case was whether the right to sue for pre emption under s.12 of the Punjab Laws Act upon a cause of action which accrued to a person in his life time passed at his death to his successor who inherited the property through which the right had accrued.
The view of the Full Bench as regards the transfer by inheritance was that the general principle applied and that the right of pre emption passed with the land and the learned Judges distinguished the transfer by inheritance from the transfer of property by some voluntary act of the par ties.
At p. 641 of the Report, Clark, C.J. observed : "While, therefore, there is good reason why volun tary transfers should not pass a right of pre emption as regards properties previously sold, those reasons do not apply to transfers by inheritance.
As regards transfers by inheritance, the general principle should apply that the right of pre emption passes with the land.
Mr. Grey laid great stress on sections 13 and 16 of the, Punjab Laws Act urging that the father was the person on whom the notice had to be served, and that it was he who had the right to sue and that the right was thus a personal one that could not (1) 133 P. R. 1907.
838 be inherited by the son.
The right was no doubt a personal one in the father based on his land, but I can see no reason why such right cannot be inherited by the son.
If the father had waived or otherwise disposed of his right this would no doubt be binding on the son, as the father was representing the whole estate.
Where, however, the father has done nothing of the kind, but has simply taken no steps in the matters, there seems to me no reason why the son should not step into the shoes of his father and take the same action as the father could have done.
The son inherits the other causes of 'action belonging to his father and why not this one ? Nor do I see why the son cannot come in under Section 16, simply alleging that no notice as required by section 13 was served on his father".
A similar view was expressed by the Full Bench of the Allahabad High Court in Wajid Ali & Ors.
vs Shaban & Ors.
It was held that where a right of pre emption exists by custom as recorded in the village wajib ul arz, the right having once accrued did not of necessity lapse by the death of the pre emptor before making a claim, but descended along with the property in virtue of which it subsisted to the heir of the pre emptor.
It is necessary to emphasize that we are dealing in this; case with the statutory right of pre emption under Punjab Act 1 of 1913 and its subsequent amendment and not with the right of preemption under the Mohammedan Law.
In regard to the latter right it has been held that according to the Mohammadan law applicable to the Sunni sect if a plaintiff in a suit for pre emption has not obtained his decree for pre emption in his life time the right to sue does not survive to his heirs. (See Muhammad Husain vs Niamet un nissa and Ors.) (2).
It is not necessary for us to express any opinion on this point in the present case.
On behalf of the respondent it was also pointed out that after the passing of the decree by the, trial court, Neki complied with the terms of the decree and made payments within the time given.
It was said that under the terms of section 14 and section 1 5 (1 ) (a) the title to the land in the pre emption suits must be deemed to have accrued to Neki from the date of such payment.
It was argued that before his death, Neki became the owner of the lands which were the subject matter of pre emption and the legal representatives of Neki were substituted in his place as representing the estate of Neki.
In support of this proposition counsel relied upon the language of 0.20 r. 14(1) which states : "Where the court decrees a claim to pre emption in respect of a particular sale of property and the pur (2) 1.
L. R. 20 All.
88. 839 chase money has not been paid into Court, the decree shall (a) specify a day on or before which the purchasemoney shall be so paid, and (b) 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.
" In this connection counsel referred to the decision of the Punjab High Court in Ganga Ram & Ors.
vs Shiv Lal(1) where it was held that the title to the preempted property passes to the pre emptor under a pre emption decree on deposit of the purchase money in terms of the decree and was deemed to.
pass to him from the date of the deposit.
So far suit No. 368 is concerned, there is a dispute as to whether or not Neki deposited the amount under the decree within the time prescribed but as regards suits Nos. 311 and 369 of 1961, it is admitted that the deceased Neki made the payment of the amount under the two decrees within the time prescribed.
So far as these two decrees are concerned, the deposit of the purchase money is an additional reason for holding that the legal representatives of Neki were properly substituted in his place in the proceedings of the second appeals.
It was finally urged on behalf of the appellants that, in any vent, section 31 of the Punjab Act 1 of 1913 as amended by Punjab Act 10 of 1960 stood as a bar to the granting of a decree in favour of the substituted respondents.
The argument was stressed that section 31 of the Punjab Act 1 of 1913 was in plain words retrospective in character and Dhara Singh and his two sons as legal representatives of Neki could not be granted a decree for pre emption.
In our opinion, this argument is wholly irrelevant.
The reason is that the Amending Act came into force on February 4, 1960 and Neki instituted the present suits for pre emption long after this date.
Even the three sales of land were effected after the promulgation of the Amending Act.
Reliance was placed on behalf of the appellants on the decision of this Court in Ram Sarup vs Munshi & Ors.(1) but the material facts of that case are quite different.
It appears that the claim of pre emption in that case was based upon section 15(c) 'thirdly ' of the Punjab Pre emption Act 1913 which states: (1) 66 P. L. R. (1964), 251.
(2) 840 "Subject to the provisions of section 14 the right of preemption in respect of agricultural land and village immoveable property shall vest (a) where the sale is by a sole owner or occupancy tenant or, in the case of land or property jointly owned or held, is by all the co sharers jointly, in the persons in order of succession, who but for such sale would be entitled, on the death of the vendor or vendors, to inherit the land or property sold; (b) where the sale is of a share out of joint land or property, and is not made by all the co sharers jointly, firstly, in the lineal descendants of the vendor in order of succession; secondly, in the co sharers, if any, who are agnates, in order of succession; (c) If no person having, a right of pre emption under clause (a) of clause (b) seeks to exercise it: thirdly, in the owners of he estate;. . " By section 4 of the amending Act (Act 10 of 1960) section 1 5 of the parent Act was repeated and in its place was substituted a new provision which omitted to confer a right of pre emption in the case of persons 'owning land in the estate ' as the original section 15(c) 'thirdly ' had done.
Retrospective effect was given to the provision by the insertion of a new section 31 in the.
parent Act.
The question for consideration was that whether by reason of this amendment in the law the respondent was entitled to the benefit of the decree which he obtained under the previously existing enactment.
It was the case of the plaintiff that he owned land in the 'estate ' whereas the vendee did not own land there.
The defendant while not disputing that the plaintiff owned land in the village or the correctness of the allegation that the land was in an 'estate ', sought to prove that he too owned land in the same village and 'estate ' but in this he failed.
As the case of the plaintiff was directly covered by the terms of the statute his suit was decreed by the trial court on Novber 8, 1951, and an appeal and second appeal therefrom were also dismissed.
The question was whether the respondent was entitled to a decree in view of section 31 of the Punjab Pre emption Act 1913 as amended by Punjab Act 10 of 1960 which came into force on February 4, 1960.
It was held by this Court that in view of the plain language of section 3 1, the substantive law enacted by the legislature in the amended section 15 of the Pre emption 841 Act should be applied and the decree for pre emption in favour of the first respondent should be set aside.
It is manifest that the material facts of the present case are different and the ratio of the decision of this Court in Ram Sarup vs Munshi & Ors.
(1) has no application to the present case.
In Ram Sarup 's case(1) the right of the plaintiff to pre empt was extinguished retrospectively; in the present case Neki 's right to sue has not been extinguished Neki had the right of pre emption under the Amended Act at the time he, instituted the suit and Neki 's right was not extinguished on his death but passed to his legal representatives.
For the reasons expressed above, we hold that these appeals have no merit and must be dismissed with costs.
There will be one set of hearing fee.
Y.P. (1) ; Appeals dismissed. | By section 4 of the Amending Act (Punj.
Act 10 of 1960) section 15 of the Punjab Pre emption Act, 1913 was repealed and in its place was substituted a new provision which omitted to confer a right of pre emption in the case of persons 'owning land in the estate ' as the original section 15(c) 'thirdly ' had done.
Retrospective effect was given to the provisions by the insertion of new section 31 in the parent Act.
In respect of sales effected after the promulgation of the Amending Act, one N filed suits and obtained decrees for pre emption in all suits against the appellants under section 15(1)(a) of the Punjab Pre emption Act.
These decrees were confirmed by the first appellate court.
While the second appeals were pending in the High Court, N died, and his legal representatives were brought on record.
The High Court dismissed the appeals.
In appeals to this Court, it was contended that (i) the statutory right of pre emption under the Punjab Preemption Act, was not a 'heritable right ' and no decree for pre emption should have been passed by the lower court in favour of the legal representatives; and (ii) section 31 of the Act as amended retrospectively by Punjab Act 10 of 1960, stood as a bar to the granting of a decree in favour of substituted legal representatives.
HELD : The appeals must be dismissed.
(i) The statutory right of pre emption though not amounting to an interest in the land is a right which attaches to the land and which can be enforced against a purchaser by the persons entitled to pre empt.
The right of pre emption under section 15(1) (a) of the Punjab Act of 1913 is a personal right in the sense that the claim of the pre emptor depends upon the nature of his relationship with the vendor.
But under section 14 of the Act, the pre emptor must be a member of an agricultural tribe in the same group of agricultural tribes, as the vendor and the land of which preemption is sought must be in respect of agricultural land sold to a member of the agricultural tribe.
If an involuntary transfer takes place by inheritance the successor to the land takes the whole bundle of the rights which go with the land including the right of pre emption.
This view is sup ported by the language of section 306 of the Indian Succession Act and therefore, the claim of N for pre emption did not abate upon his death and his legal representatives were properly brought on 'record of the second appeals under the provisions of 0. 22, r. 1 read with 0. 22, r. 10 of the Code of Civil Procedure.
(836 G; 837 B D] Faqir Ali Shah vs Rani Kishan & Ors.
133 P.R. 1907 and Wajid Ali & Ors.
vs Shaban & Ors.
1.L.R. 31 All 623, approved.
Muhammad Husain vs Niamat un nissa & Ors.
I.L.R. 20 All, 88, referred to. 834 (ii) The Amending Act came into.
force long before N instituted the present suits.
Even the sales of land were effected after the promulgation of the Amending Act.
In Ram Sarup 's case, the right of the plaintiff to pre empt was extinguished retrospectively; in the present case N 's right to sue has not been extinguished.
N had the right of pre emption under the Amended Act at the time he instituted the suit and N 's right was not extinguished on his death but passed to his legal representatives.
[839 G] Ram Sarup vs Munshi & Ors.
[196.3] 3 S.C.R. 858, distinguished. |
iminal Appeal No.122 of 1965.
Appeal from the judgment and order dated December 1, 1964 of the Allahabad High Court in Government Appeal No.785 of 1963.
P. Rana, for the appellant.
J. P. Goyal and Sobhag Mal Jain, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by certificate, the only question that arises for decision is as to the true scope of the expression "time requisite for obtaining a copy of the decree, sentence or order appealed from" found in sub section
2 of section 12 of the Indian Limitation Act 1908 which wilt be hereinafter referred to as the Act.
The said question arose for decision under the following circumstances: The respondents were tried for various offences before the learned assistant sessions judge, Farrukhabad.
The said learned judge acquitted them.
Against the order of acquittal the State went up in appeal to the High Court of Allahabad.
The said appeal was dismissed as being barred by limitation.
The correctness of that decision is in issue in this appeal.
Item 157 of the first schedule to the Act prescribes that the period of limitation for an appeal under the Code of Criminal Procedure 1898, from an order of acuittal is three months from the date of the order appealed from.
But sub section 2 of section 12 provides that in computing the period of limitation prescribed for an appeal the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the order appealed from shall be excluded.
The memorandum of appeal was filed into court on March 29, 1963.
The order appealed from bad been delivered on Novem ber 10, 1962.
According to the information contained in the copy of the order produced along with the said memorandum the appeal was within time.
It showed that that copy was, applied for on November 15, 1962 and the same was ready on January 3, 1963.
It was contended on behalf of the respondents that the appeal was out of time in view of the fact that the appellant had applied for and obtained two other copies of the order appealed from and if time is calculated on the basis of those copies the appeal was beyond time.
In addition to the copy referred to earlier, the 844 appellant had applied for another copy of the order appealed from on December 3, 1962 and that copy was ready for delivery on December 20, 1962.
The appellant also applied for yet another copy of the same order on December 21, 1962 and that copy was made ready on the same day.
There is no dispute that if the period of limitation is computed on the basis of those copies the appeal was barred by limitation.
But the point for consideration is whether the obtaining of those copies has any relevance in the matter of computing the period of limitation for the appeal.
The High Court of Allahabad accepted the contention of the respondents that in determining the time requisite for obtaining a copy of the order appealed from, it had to take into consideration the copies made available to, the appellant on the 20th and 21st December, 1962.
It opined that the expression 'requisite ' found in section 12(2) means "properly required", and hence the limitation has to be computed on the basis of the copy made available to the appellant in December, 1962.
It was not disputed on behalf of the respondents that it was not necessary for the appellant to apply for a copy of the order appealed from immediately after the order was pronounced.
The appellant could have, if it chose to take the risk, waited till the ninety days period allowed to it by the statute was almost exhausted.
Even then the time required for obaining a copy of the order would have been deducted in calculating the period of limitation for filing the appeal.
Hence the expression 'time requisite ' cannot be understood as the time absolutely necessary for obtaining the copy of the order.
What is deductible under section 12(2) is not the minimum time within which a copy of the order appealed against could have been obtained.
It must be, remembered that sub section 2 of section 12 enlarges the period of limitation prescribed under entry 157 of Schedule 1.
That section permits the appellant to deduct from the time taken for filing the appeal, the time required for obtaining the copy of the order appealed from and not any lesser period which might have been occupied if the application for copy had been filed at some other date.
That section lays no obligation on the appellant to be prompt in his application for a copy of the order.
A plain reading of section 12(2) shows that in computing the period of limitation prescribed for an appeal, the day on which the judgment or order complained of was pronounced and the time taken by the court to make available the copy applied for, have to be excluded.
There is no justification for restricting the scope of that provision.
If the appellate courts are required to find out in every appeal filed before them the minimum time required for obtaining a copy of the order appealed from, it would be unworkable.
In that event every time an appeal is filed, the court not only will have to see 84 5 whether the appeal is in time on the basis of the information available from the copy of the order filed along with the memorandum of appeal but it must go further and hold an enquiry whether any other copy had been made available to the appellant and if so what was the time taken by the court to make available that copy.
This would lead to a great deal of confusion and enquiries into the alleged laches or dilatoriness in respect not of copies produced with the memorandum of appeal but about other copies which he might have got and used for other purposes with which the court has nothing to do.
The High Court in arriving at the decision that the appeal is barred by time relied on the decision of the Lahore High Court in Mathela and Others vs Sher Mohammad(1).
It also sought support from the decisions of the Judicial Committee in Pramatha Nath Roy vs Lee( ) and J. N. Surty vs T. section Chettyar(3).
The Lahore decision undoubtedly supports the view taken by the High Court.
It lays down that the words "time requisite" mean simply time required by the appellant to obtain a copy of the decree assuming that he acted with the reasonable promptitude and diligence.
It further lays down that the time requisite for obtaining a copy is the shortest time during which the copy would have been obtained by the appellant, and it has nothing to do with the amount of time spent by him in obtaining the copy which he chooses to tile with the memorandum of appeal.
With respect to the learned judges who decided that case we are unable to spell out from the language of section 12(2) the requirement that the appellant should act with reasonable promptitude and diligence and the further condition that the time requisite for obtaining a copy should be the shortest time during which a copy could have been obtained by the appellant.
We are of the opinion that the said decision does not lay down the law correctly.
Now we shall proceed to consider the decisions of the Judicial Committee relied on 'by the High Court.
In Pramatha Nath Roy vs Lee (2) the appellant was found to be guilty of laches.
The Judicial Committee held that he was not entitled to deduct the time lost due to his laches.
It is in that context the Board observed that the time which need not have elapsed if the appellant had taken reasonable and proper steps to obtain a copy of the decree or order could not be regarded as 'requisite ' within sub section 2 of section 12.
That decision does not bear on the question under consideration.
In J. N. Surty vs T. section Chettyar 3 the question that fell for decision by the Judicial Committee was whether in reckoning the time for presenting an appeal, the time required for obtaining (1) A.I.R. 1935 Lah. 682.
L3Sup.
CI/68 10 (3) 55 [.A. 161.
(2) 49 I.A. 3 7. 846 a copy of the decree or judgment must be excluded even though by the rules of the court it was not necessary to produce with the memorandum of appeal the copy of the decree or judgment.
Their Lordships answered that question in the affirmative.
While deciding that question, their Lordships considered some of the observations made by the High Court relating to the dilatoriness of some Indian practitioners.
In that context they observed "There is force no doubt in the observation made in the High Court that the elimination of the requirement to obtain copies of the documents was part of an effort to combat the dilatoriness of some Indian practitioner; and their Lordships would be unwilling to discourage any such effort.
All, however, that can be done, as the law stands, is for the High Courts to be strict in applying the provision of exclusion.
The word 'requisite ' is a strong word; it may be regarded as meaning something more than the word ` required '.
It means 'properly required ' and it throws upon the pleader or counsel for the appellant the necessity of showing that no part of the delay beyond the prescribed period is due to his fault.
" In other words, what their Lordships said was that any delay due to the default of the pleader of the appellant cannot be deducted.
There can be no question of any default if the steps taken by the appellant are in accordance with law.
Hence, the above quoted observations of the Judicial Committee can have no application to the point under consideraion.
Preponderance of judicial opinion is in favour of the con clusion reached by us earlier.
The leading case on the subject is the decision of the full bench of the Madras High Court in Panjamv.
Trimala Reddy(1), wherein the court laid down that in section 12 the words 'time requisite for obtaining a copy of the decree ' mean the time beyond the party 's control occupied in obtaining the copy which is filed with the memorandum of appeal and not an ideal lesser period which might have been occupied if the application for the copy had been filed on some other date.
This decision was followed by the Travancore Cochin High Court in Kunju Kesavan vs M. M. Philip(2), by the Allahabad High Court in B. Govind Rai Sewak Singh and Another vs Behuti Narain Singh(3) and by the Madhya Pradesh High Court in K. U. Singh vs M. R. Kachhi (4) .
From the above discussion it follows that the decision under appeal does not lay down the law correctly.
But yet we are of (1) I.L.R. (3) A.I.R. 1950 All. 486.
(2) A.I.R. 1953 T.C. 552.
(4) A.I.R. 1960 M.P. 140.
847 the opinion that this is not a fit case to interfere with the order of the High Court dismissing the appeal.
The respondents were acquitted by the assistant sessions judge, Farrukhabad on November 10, 1962.
We were informed by learned counsel for the State that this appeal was brought to this court mainly with a view to settle an important question of law, and under instructions from the State government he told us that he does not press the appeal on merits.
Accordingly this appeal is dismissed.
R.K.P.S. Appeal dismissed. | The appellant State filed an appeal in the High Court on March 29, 1963 against the order made by the trial court on November 10, 1962 acquitting the respondents.
According to the information contained in the copy of the order produced along with the Memorandum of Appeal, the appeal was filed within time.
It Showed that the copy was applied for on November 15, 1962 and it was ready on January 3, 1963.
It was contended on behalf of the respondents that the appeal was out of time in view of the fact that the appellant had applied for and obtained two other copies of the order appealed from and if time was calculated on the basis of those copies the appeal was beyond time.
In addition to the copy referred to earlier, the appellant had applied for another copy of the order appealed from on December 3, 1962, and that copy was ready for delivery on December 20, 1962.
The appellant also applied for yet another copy of the same order on December 21, 1962 and that copy was made ready on the same day.
It was not disputed that if the, period of limitation was computed on the basis of the two later copies, the appeal was barred by limitation.
The High Court accepted the respondent 's contention and dismissed the appeal.
On appeal to this Court.
HELD : That the decision of the High Court under appeal did not lay down the law correctly.
The expression 'time requisite ' in section 12(2) of the Limitation Act cannot be understood as the time absolutely necessary for obtaining the copy of the order.
What is deductible under section 12(2) is not the minimum time within which a copy of the order appealed against could have been obtained.
It must be remembered that section 12(2) enlarges the period of limitation prescribed under entry 157 of Schedule 1.
That section permits the appellant to deduct from the time taken for filing the appeal, the time required for obtaining the copy of the order appealed from and not any lesser period which might have been occupied if the application for copy had been filed at some other date.
That section lays no obligation on the appellant to be prompt in his application for a copy of the order.
A plain reading of section 12(2) shows that in computing the period of limitation prescribed for an appeal, the day on which the judgment or order complained of was pronounced and the time taken by the court to make available the copy applied for.
have to be excluded.
There is no justification for restricting the scope of that provision.
[844 E H] Mathela.
and others vs Sher Mohammad, A.I.R. 1935, Lah. 682; disapproved.
Pramatha Nath Roy V. Lee, 49 I.A. 307 and J. N. Surty vs T. section Chettyar, 55 I.A. 161; distinguished.
84 3 Panjam vs Trimala Reddy, I.L.R. ; Kunju Kesavan vs M.M. Philip, A.I.R. 1953 T.C. 552; B. Govind Rai Sewak Singh and Anr.
vs Behuti Narain Singh.
A.I.R. 1950, All. 486 and K. U. Singh vs M. R.Kachhi, A.I.R. 1960 M.P. 140; referred to. |
Appeal No. 124 of 1951.
Appeal by Special Leave granted by His Majesty in Council, dated the 30th October, 1945, from the Judgment and Decree, dated the 12th July, 1944, of the High Court of Judicature at Lahore in Civil Regular Second Appeal No. 450 of 1942, against the Judgment and Decree, dated the 14th January, 1942, of the Court of the District Judge, Gurdaspur, in Appeal No. 91 of 1941, arising from the Judgment and Decree, dated 31st July, 1941, of the Court of Senior Subordinate Judge, Gurdaspur, in Suit No. 80 of 1940.
G. section Vohra and Harbans Singh for the appellants.
Achhru Ram (J. B. Dadachanji and R. N. Sachthey, with him) for respondents.
45 1954.
April 1.
The Judgment of the Court was delivered by GHULAM HASAN J.
This is an appeal by special leave granted by the Privy Council against the judgment and decree dated July 12, 1944, of a Division Bench of the High Court at Lahore passed in second appeal confirming the dismissal of the appellants ' suit cone currently by the trial Court and the Court of the District Judge, Gurdaspur.
The two appellants are admittedly the first cousins of the respondent, Harnam Singh, and belong to village Gillanwali, Tahsil Batala, District Gurdaspur.
Gurmej Singh, respondent No. 2, is a collateral of Harnam Singh in the 8th degree.
The appellants sued for a declaration that the deed of adoption executed by Harnam Singh on July 30, 1940, adopting Gurmej Singh was invalid and could not affect the reversionary rights of the appellants after the death of Harnam Singh.
The appellant 's case was that under the Customary Law of Gurdaspur District applicable to the Gill Jats ,of village Gillanwali, Harnam Singh could only adopt a is near collateral" and Gurmej Singh being a distant collateral his adoption was invalid.
The defence was a denial of the plaintiffs ' claim.
Both the trial Judge and the District Judge on appeal held that the factum and the validity of the adoption were fully established.
In second appeal Trevor Harries C. J. and Mahajan J. (as he then was) held that there was sufficient evidence of the factum of adoption as furnished by the deed and the subsequent conduct of Harnam Singh.
They held that all that was necessary under the custom to constitute an adoption was the expression of a clear intention on the part of the adoptive father to adopt the boy concerned as his son and this intention was clearly manifested here by the execution and registration of the deed of adoption coupled with the public declarations and treatment as adopted son.
Upon the legal validity of the adoption the High Court found that the answer to Question 9 of the Riwaj i am of Gurdaspur District of the year 1913 laying down that the adoption of "near collaterals only " was recognised was not mandatory.
The High Court relied in support of their 46 conclusion on a decision of Tek Chand J. in Jowala vs Diwan Singh (1) and the Privy Council decision in Basant Singh vs Brij Raj Saran Singh (2).
The first question regarding the factum of adoption need not detain us long.
The deed of adoption, Exhibit D. 1, recites that Harnam Singh had no male issue who could perform his kiry a karam ceremony after his death, that Gurmej Singh had been brought up while he was an infant by his wife and that he had adopted him according to the prevailing custom.
The recital continues that since the adoption he had been treating and calling Gurmej Singh as his adopted son.
This fact was well, known in the village and the adoptee was en joying all rights of a son.
He had executed a formal document in his favour in order to put an end to any dispute which might be raised about his adoption.
As adopted son he made him the owner of all of his property.
We are satisfied that there is ample evidence to sustain the finding on the factum of adoption.
The main question which falls to be considered is whether under the terms of the Riwaj i am applicable to the parties, Gurmej Singh being a collateral of Harnam Singh in the 8th degree could be validly adopted.
The custom in question is founded on Question 9 and its answer the Customary Law of the Gurdaspur District.
They are as follows: " Question 9.
Is there any rule by which it is required that the person adopted should be related to the person adopting ? If so, what relatives may be adopted ? Is any preference required to be shown to particular relatives ? If so, enumerate them in order of preference.
Is it necessary that the adopted son and his adoptive father should be (1) of the same caste or tribe; (2) of the same got? Answer : The only tribes that recognised the adoption of a daughter 's son are the Sayyads of the Shakargarh and the Arains of the Gurdaspur Tahsil.
The Brahmans of the Batals Tahasil state that only such of them as are not agriculturists by occupation recognize such adoption.
The Muhamadan Jats of the (1) (2) I.L.R. 57 All 494.
47 Gurdaspur.
Tahsil could not come to an agreement on this point.
The remaining tribes recognise the adoption of War collaterals only.
The right of selection rests with the person adopting.
The Khatris, Brahmans and Bedis and Sodis of the Gurdaspur Tahsil, however, state that the nearest collaterals cannot be sperseded and selection should always be made from among them" It is contended for the appellants that the expression " near collaterals only " must be construed to mean a collateral up to the third degree and does not cover the case of a remote collateral in the 8th degree.
The restriction as regards the degree of relationship of the adoptee, it is urged, is mandatory and cannot be ignored.
The expression " near collaterals " is not defined by the custom.
The relevant answer which we have underlined above gives no indication as to the precise import of the words " near collaterals.
" The custom recorded in the Riwaj i am is in derogation of the general custom and those who set up such a custom must prove it by clear and unequivocal language.
The language is on the face of it ambiguous and we can see no warrant for limiting the expression to signify collateral relationship only up to a certain degree and no further.
We are also of opinion that the language used amounts to no more than an expression of a wish on the part of the narrators of the custom and is not mandator.
If the intention was to give it a mandatory force, the Riwaj i am would have avoided the use of ambiguous words which are susceptible of a conflicting interpretation.
The provision that the right of selection rests with the person adopting also detracts from the mandatory nature of the limitation imposed upon the degree of relationship.
Though the adoption of what the custom describes as "near collaterals only" was recognized by the community of Jats, the right of selection was left to the discretion of the adopter.
There is no meaning in conferring a discretion upon the adopter if he is not allowed to exercise the right of selection as between collaterals inter se.
We are unable to read into the answer a restriction upon the choice of the adopter of any particular collateral however near in degree he may be, 48 In his valuable work entitled "Digest of Customary Law in the Punjab" Sir W.H. Rattigan states in paragraph 35 that "a sonless proprietor of land in the central and eastern parts of the Punjab may appoint one of his kinsmen to succeed him as his heir" and in paragraph 36 that "there is no restriction as regards the age or the degree of relationship of the person to be appointed".
It appears to us that the basic idea underlying a customary adoption prevalent in the Punjab is the appointment of an heir to the adopter with a view to associate him in his agricultural pursuits and family affairs.
The object is to confer a personal benefit upon a kinsman from the secular point of view 'unlike the adoption under the Hindu Law where the primary consideration in the mind of the adopter if a male is to derive spiritual benefit and if a female, to confer such benefit upon her husband.
That is why no emphasis is laid on any ceremonies and great latitude is allowed to the adopter in the matter of selection.
Mulla in his well known work on Hindu Law says: "It has similarly been held that the texts which prohibit the adoption of an only son, and those which enjoin the adoption of a relation in preference to a stranger, are only directory; therefore, the adoption of an only son, or a stranger in preference to a relation, if completed, is not invalid.
In cases such as the above, where the texts are merely directory, the principle of factum valet applies, and the act done is valid and binding." (Page 541).
We see no reason why a declaration in a Riwaj i am should be treated differently and the text of the answer should not be taken to be directory.
However peremptory may be the language used in the answers given by the narrators of the custom, the dominant intention underlying their declarations which is to confer a temporal benefit upon one 's kinsmen should not be lost sight of.
A number of cases have been cited before us to show that in recording the custom the language used was of peremptory nature and yet the Courts have held that 49 the declarations were merely directory and non compliance with those declarations did not invalidate the custom.
In Jiwan Singh and Another vs Pal Singh and Another(1) Shah Din and Beadon JJ.
held "that by custom among Randhawa Jats of Mauza Bhangali, Tahsil Amritsar, the adoption, by a registered deed, of a collateral in the 9th degree who is of 16 years of age is valid in the presence of nearer collaterals.
" The adoption was objected to on the ground that the adoptee was a remote collateral and that he was not under the age of twelve at the time of the adoption as required by the Riwaj i am.
The learned Judges held that the provision as regards the age was recommendatory and not of a mandatory character.
In Sant Singh vs Mula and Others ) Robertson and Beadon Jj.
held "that among Jats and kindred tribes in the Punjab, the general, though not 'the universal, custom is that a man may appoint an heir from amongst the descendants of his ancestor and that he need not necessarily appoint the nearest collateral.
" This was a case where a distant collateral was preferred to a nearer collateral.
The learned Judges expressed the opinion that the clause which points to the advisability of adopting from amongst near collaterals was nothing more than advisory.
In Chanan ' Singh vs Buta Singh and Others(3), a case from Jullundur District, the question and answer were as follows : "Q. No. 71: Are any formalities necessary to constitute a valid adoption, if so, describe them.
State expressly whether the omission of any customary ceremonies will vitiate the adoption ? A. .
The essence of adoption is that the fact of adoption be declared before the brotherhood or other residents of the village.
The usual practice is that the Baradari gathers together and the adopter declares in their presence the fact of the adoption.
Sweets are distributed and a deed of adoption is also drawn up.
If (1) 22 P.R. (2) 44 P.R. (3) A.I.R. 1935 Lah.
7 50 these formalities are not observed the adoption is not considered valid.
" The adoption was challenged on the ground that there was no gathering of the brotherhood.
The learned Judges (Addison and Beckett JJ.) held that it was immaterial whether there was or was not a gathering of the brotherhood at the time.
It appears that the adopter had made a statement in Court acknowledging the appointment or adoption in question.
The next day he celebrated the marriage of the boy as his son, and thereafter he looked after his education and allowed him to describe himself as his adopted son or appointed heir, and the boy lived with him as his son.
The learned Judges held that the details given in the answers to questions in various Customary Laws were not necessarily mandatory but might be merely indicatory.
In Jowala vs Dewan Singh(1) Tek Chand J. held "that an adoption of a collateral in the fourth degree, among Jats of Mauza Hussanpur, Tahsil Nakodar, District Jullundur, is valid although nearer collaterals are alive." He also held "that an entry in the Riwaj i am as to the persons who can be adopted is merely indicatory".
In a case from Delhi reported in Basant Singh and Others vs Brij Raj Saran Singh(2)the Privy Council held "that the restriction in the Riwaj i am of adoption to persons of the same gotra is recommendatory and a person of a different gotra may be adopted.
" Counsel for the appellants frankly conceded that he could cite no case where the declarations governing customary adoptions were held to be mandatory.
Whether a particular rule recorded in the Riwaj i am is mandatory or directory must depend on what is the essential characteristic of the custom.
Under the Hindu Law adoption is primarily a religious act intended to confer spiritual benefit on the adopter and some of the rules have, therefore, been held to be mandatory and compliance with them regarded as a condition of the validity of the adoption.
On the other hand, under the (1) (2) 57 All, 494. 51 Customary Law in the Punjab, adoption is secular in character, the object being to appoint an heir and the rules relating to ceremonies and to preferences in selection have to be held to be directory and adoptions made in disregard of them are not invalid.
There is no substance in the appeal and we dismiss it with costs.
Appeal dismissed. | Held, that under the Customary Law of Gurdaspur District (Punjab) applicable to the Gill Jats of village Gillanwali, the adoption of a collateral of the 8th decree is not invalid.
The answer to question 9 in Customary Law of the Gurdaspur District that "the adoption of near collateral only" should be recognised is not mandatory but directory.
Under the Customary Law in the Punjab, adoption is secular in character, the object being to appoint an heir and the rules relating to ceremonies and to preferences in selection have to be held to be directory and adoptions made in disregard of them are not invalid.
Jiwan Singh and Another vs Pal Singh and Another (22 P.R. 1913 at p. 84); Sant Singh vs Mula and Others (44 P.R. 1913 at p. 173); Charan Singh vs Butta Singh and Others (A.I.R. ; Jowala vs Dewan Singh ; and Basant Singh and Others vs Brij Raj Saran Singh (I.L.R. 57 All. 494) referred to: |
ivil Appeal No. 350 of 1977.
From the Judgment and Order dated 19.10.1976 of the Madhya Pradesh High Court in Second Appeal No. 385 of 1974.
S.N. Kacker and Shri Narain for the Appellants.
Harish N. Salve, Mrs. P.S. Shroff, S.S. Shroff and S.A. Shroff for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave arises out of a suit filed by the respondent for setting aside the decree in an earlier suit being Suit No. 61 A of 1955 instituted by Dammu Lal, husband of the respondent No. 1 and father of respondent No. 2 to 12, for eviction of the appellants from a building in Raipur which is in their occupation as tenants.
Dammu Lal also prayed for a decree for arrears of rent and damages.
The prayer for eviction was allowed along with a money decree for Rs.260 as arrears of rent and Rs.137 as damages the tenants filed an appeal which was numbered as Civil Appeal No 7 A of 1965.
During the pendency of the appeal Dammu Lal died and his legal representatives were substituted as respondents.
Some of his children were minor who were placed under the guardianship of their mother Smt.
Sugandhibai, respondent No. l.
An application purporting to be a compromise petition on behalf of all the parties was filed before the court which was recorded and the suit was disposed of in its terms by the appellate court on 23.4.1966.
According to the compromise the entire decree was set aside and the suit was dismissed, with the parties bearing their own costs.
The respondents have challenged the compromise decree by the present suit.
The trial court dismissed the suit.
On appeal the first appellate court reversed the decision, set aside the compromise decree and directed the Civil Appel No. 7 A of 1965 to be disposed of afresh1 in accordance with law.
By PG NO 198 the impugned judgment the High Court dismissed the second appeal preferred by the appellants.
Mr. Kacker, the learned counsel appearing in support of the appeal, placed the facts relevant to the several questions raised by the parties and decided by the courts below and contended that the decision of the High Court is illegal on several grounds.
We do not consider it necessary to go into all the questions disposed of by the courts below as the respondents are, in our view, entitled to succeed in the suit on one of the several points urged on their behalf which is discussed below.
As has been stated earlier, some of the party respondents in Civil Appeal No. 7 A of 1965 including Kamal Kumar, one of the sons of Dammu Lal, were minor and were represented by Mr. Makasdar, Advocate.
In view of the provisions of Order XXXII, Rule 7 of the Code of Civil Procedure, it was essential for the court to have granted permission to the guardian to enter into the compromise only after considering all the relevant circumstances.
From the records of the case it appears that the court before recording the compromise sanctioned leave in the following words: "As the appellant is prepared to forego the entire cost of the proceedings, it is in the interest of the minors and benefit of the minors that this appeal be compromised.
The minor respondents are represented by senior counsel and his opinion is that it will be in the interest of the minor to compromise the appeal.
In view of this, I have no reason to disagree with him.
I am satisfied that the compromise is in the interest of the minors, hence, I allow the application and grant the necessary permission under Order 32 Rule 7 C.P.C. to the learned counsel of the minor respondents to compromise the appeal.
" On the face of it, the compromise was one sided whereby the minors were giving up their right under the trial court 's decree both in respect to eviction as well as arrears of rent and damages.
It is said that as a consideration for the compromise the appellants were giving up their right to claim costs which might have been decreed by the appellate court in case of their success c.n merits.
According to the respondents ' case which has been accepted by the two courts below the guardian of the minors was guilty of gross negligence in entering into the com promise by failing to take into account the interest of the minors.
On behalf of the appellants it has been contended PG NO 199 that during the pendency of Civil Appeal No. 7 A of 1965 the M.P. Accommodation Control Act was passed and the decree of the trial court was likely to be set aside.
In that view, it is urged, the minor 's guardian through Mr. Makasdar acted rightly in settling the dispute and thus saving a decree for costs which could have been passed against them.
According to the further case of the respondents the relevant circumstances and the terms of the compromise were never explained to the respondent No. 1 and Mr. Mokasdar asked for the court 's permission to enter into the compromise on behalf of the minor without any instruction from their guardian in this regard.
It is also urged that the language of the order whereby the court granted its permission indicates that the court did not apply its mind independently.
However, we do not consider it necessary to decide these points as also several others raised by the parties as in our view the compromise decree must be set aside on the ground of gross negligence.
It has not been suggested on behalf of the appellants in the present case that there was any ground available to them to successfully challenge the money decree passed in the earlier suit.
Mr. Kacker also has not suggested any possible ground against that part of the decree.
He, however, said that the decree was not for a substantial amount as it was for less than Rs.400, and should therefore be ignored for the purposes of this case.
The question as to whether the amount was substantial or not has to be judged in the light of the circumstances in the case.
Here the building in question was a small one fetching a small amount of rent and a sum of Rs.400 could not be ignored as inconsequential or unsubstantial.
It has also to be remembered that even the cost in such a suit which was the sole consideration for the compromise could not be a large sum.
Besides, neither the minors advocate nor the court appears to have really considered the impact of the rent Act on the fate of the appeal which came in force during the pendency of the litigation.
We, therefore, hold that the compromise decree is fit to be set aside, and the decision of the court below does not call for any interference.
Accordingly Civil Appeal No. 7 A of 1965 is restored to its file before the II Additional District Judge, Raipur and will now be disposed of in accordance with law.
The appeal is dismissed with costs payable to respondents No. I to 12.
P. S .
Appeal dismissed . | The husband of respondent No. l sought eviction of the appellants tenants.
The suit was decreed in his favour along with money decree for arrears of rent and damages.
During the pendency of the appeal the plaintiff died and his legal representatives were substituted as respondents.
Some of his children who were minor were placed under the guardianship of respondent No. 1.
Consequent to a petition by the parties a compromise decree was passed setting aside the entire decree.
The respondents thereafter challenged the compromise decree.
The trial court dismissed the suit.
On appeal the first appellate court reversed the decision.
The High Court dismissed the appeal, preferred by the appellants.
In this appeal by special leave it was contended for the appellants that as a consideration for the compromise they were giving up their right to claim costs which might have been decreed by the appellate court in case of their success on merits.
The respondents ' case was that the guardian of the minors was guilty of gross negligence in entering into the compromise by failing to take into consideration the interest of the minors.
Dismissing the appeal, HELD: The decision of the courts below does not call for any interference.
The compromise decree is fit to be set aside on the ground of gross negligence.
[199F; 199Cl The compromise was one sided whereby the minors were giving up their right under the trial court 's decree both in respect of eviction as well as arrears of rent and damages.
In view of the provisions of Order XXXII, Rule 7 of the Code of Civil Procedure it was essential for the Court to have PG NO 196 PG NO 197 granted permission to the guardian to enter into the compromise only after considering all the relevant circumstances.
[198F; 198C D] The earlier civil appeal is restored to its file before the Additional District Judge for disposal in accordance with law.
[l99G] |
Appeal No. 1627 of 1967.
Appeal by special leave from the Award dated March 31, 1967 of the Industrial Tribunal, Andhra Pradesh in Industrial Dispute No. 55 of 1965.
H. R. Gokhale and D. N. Gupta, for the appellant.
M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
This appeal has been brought to this Court by special leave.
It arises from the decision ' of the Industrial Tribunal, 9 Andhra Pradesh, Hyderabad.
The only question that arises for decision is whether on the basis of the material on the record there was any justification for framing a gratuity scheme for appellant 's staff.
The admitted facts are these : The appellant concern is hav ing about 500 looms. ' It has a subscribed capital of a little over 3 5 lakhs.
Its built up reserve is over thirty lakhs.
In three out of the six years during the period 1960 65 it has suffered substantial losses.
Out of the remaining three years, in one year it made a profit of about Rs. 45,000 in another year about Rs. 13,000 and in 1962 over rupees twelve lakhs.
The annual expenses of the appellant 's concern under the head 'salaries, wages and bonus ' are nearly 47 lakhs.
It was found by the tribunal that the appellant concern and the Nellimarla Jute Mills are sister concerns.
Both of them are under a single management, viz., M/s. Mcleod and Company, Calcutta.
They are located in the same region, the distance between the two being about 25 miles.
In Nellimarla Jute Mills a gratuity scheme for the staff is in existence and that in addition to provident fund benefits.
Our attention was not invited to any material on record to show that these findings are not correct.
In the appellant concern also there is a provident fund scheme for the staff.
The appellant in its counter affidavit filed before the tribunal admitted that it had always been the policy of the management to introduce identical terms of employment for the workmen at Nellimarla and Chitavalsah.
From the material before us it is not possible to find out the financial position of the Nellimarla mills.
We ascertained from the learned counsel for the appellant that the appellant concern had made a profit of over a lakh of rupees in 1966.
The tribunal has found and that finding was not challenged before us that the additional burden to be borne by the appellant as a result of the gratuity scheme framed by it is about Rs. 3,000 per year.
On behalf of the appellant two contentions were advanced in opposition to the proposed gratuity scheme.
They are (1) the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justification to frame the impugned scheme, and (2) in view of the losses incurred by the appellant during the years 1960 65., no additional burden should have been cast on it by introducing a gratuity scheme.
So far as the Wage Board recommendations is concerned, it pertains to the jute industry as a whole.
After taking into consideration the 'importance of the jute industry for.
the national L4Sup.
Cl/68 2. 11 Burhanpur Tapti Mills Ltd. vs B. T. Mills Mazdoor Sangh [(1965) ". . there are two general methods of fixing the terms of a gratuity scheme.
It may be fixed on the basis of industry cum region or on the basis of units.
Both, systems are admissible but regard must, be had to the surrounding circumstances to select the right basis.
Emphasis must always be laid upon the financial position ,of the employer and his profit making capacity whichever method is selected, and it must be further seen "whether the industrial court was right in appraising the financial condition and the profit making capacity of the company A scheme for gratuity no doubt imposes a burden on the finances of the concern but the pressure is ex facie distributed over the years for it is limited to the number of retirements each year.
The employer is not required to provide the whole amount at once.
He may create a fund, if he likes and pay from the interest which accrues on a capitalised sum determined actuarially.
This is one of providing the money.
Ordinarily the payment is made each year to those who retire.
To judge whether the financial position would bear the strain the average number of retirements per year must be found out.
This is one part of the inquiry.
The next part of the inquiry is to see whether the employer can be expected to bear the burden from year to year.
The present condition of his finances, the past history and the future prospects all enter into the appraisal of.
his ability." In Calcutta Insurance Co. Ltd. vs Their Workmen(1), this Court observed "On the financial aspect 'of a gratuity scheme, we were referred to the case of Wenger & Co. vs Their workment [(1963) II LIJ 403].
There it was observed by this Court that the problem of the burden imposed by the gratuity scheme could be looked at in two ways.
one was to capitalise the burden on actuarial basis.
which would show theoretically that the burden would be very heavy; and the other was to look at the scheme in its practical aspect and find out how many employees retire every year on the average.
According to this Court, it was this practical approach which ought to be 'taken into account." (1) ; 12 In the light of the principles noted above and on the material placed before the tribunal it is not possible to hold that the tribunal 's conclusion was without any just basis.
For the reasons mentioned above this appeal fails and the same is dismissed with costs.
G.C. Appeal dismissed. | The appellant was a jute mill.
The Industrial Tribunal framed a gratuity scheme for its workers.
It was challenged by the appellant before this Court in an appeal under article 136 of the Constitution.
Two contentions were urged, namely : (i) that the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justi fication to frame the impugned scheme; (ii) in view of the losses incurred by the appellant during the years 1960 65, no additional burden should have been cast on it by introducing a gratuity scheme.
HELD : (i) The Wage Board 's recommendation pertained to the jute industry as a whole and not to any individual industrial unit.
It cannot be understood as recommending that there should be no gratuity scheme for the employees in any particular unit in that industry.
What was relevant to find out was whether the appellant could bear the additional burden.
[10 B] (ii) The Tribunal recommended the gratuity scheme after taking into consideration the financial position of the appellant as well as the fact that in a sister concern such a scheme was in existence.
The losses suffered by the appellant were considered by the Tribunal to be a passing phase.
What is of essence is the profit making capacity of the concern.
In determining that question one has to take into consideration the paid up capital of the company, its reserves, its earnings in the past and its future prospects.
A practical view of the question has to be taken.
[10 D, G] In the light of these principles and on the material placed before the Tribunal it was not possible to hold that the Tribunal 's conclusion was without any just basis.
[12 A] National Iron & Steel Co. Led. & Ors.
vs State of West Bengal & Anr.
; and Calcutta Insurance Co. Ltd. vs Their Workmen, ; , relied on. |
iminal Appeal No.28 of 1965.
Appeal by special leave from the judgment and order dated December 14, 1964 of the Rajasthan High Court in section B. Criminal Appeal No. 656 of 1963.
K. R. Chaudhuri, for the appellants.
K. Baldev Mehta,for the respondent.
The Judgment of the Court was delivered by Hegde, J.
The two appellants were convicted by the High Court of Rajasthan under sections 120 B and 1 61, IPC, and under sections 5 ( 1 ) (a) and 5 ( 1 ) (d) read with section 5 (2) of the Prevention of Corruption Act.
They have come up in appeal to this Court by special leave.
The first appellant was a Havaldar and the second appellant a Subedar in the Rajasthan Armed Constabulary.
At the relevant point of time they were serving in the outpost at SajanKa Par in Barmer district of Rajasthan State, which was a border outpost.
That post was within two miles from the Pakistan border.
The prosecution case is that the two appellants conspired to extort money as well as other valuable things from the villagersby using force or threat of force or by harassment.
Though they were indulging in these activities for quite some time, the matter came to a head when they tried to compel PW 1 Mohammad to give them Rs 100.
It was said that about the middle of September 1962, the first appellant came to the field of Mohammad and took him to the outpost saying that the second appellant wanted him to go over there.
At the outpost the second appellant told him that he was constantly visiting Pakistan; he was also blackmarketing; hence unless he gave him (2nd appellant) Rs. 200 he would send him to prison.
PW 1 pleaded that he was innocent.
He also pleaded that he was a poor man and hence he was unable to pay the amount demanded.
As the second appellant insisted on the payment he agreed to pay him Rs. 100 but as he had no money at that time PW 3 Kalla stood surety for him.
After a few days when PW 1 was sitting in the shop of PW 5 Bhoja, he happened to talk about the illegal activities of the appellants.
It so happened that a CID officer was there who evidently passed on that information to PW 17 Kaneihalal the Deputy Superintendent of Police,in the Special Police Establishment.
On getting that information PW 17 came to the village on September 30, 1962 and checked up the 191 facts with PW 1.
On the morning of October 1, 1962.
PW 1 was again called to the outpost by the 2nd appellant and told that the amount should be paid immediately.
He promised to pay the same that afternoon and asked the appellants to come to his house that afternoon to which they agreed.
Thereafter he passed on that information to PW 17 and gave him the complaint Exh.
Then a trap was arranged.
PW 1 produced before PW 17, Rs. 100 in ten rupee currency notes.
PW 17 noted down their numbers in the presence of panch witnesses PW 2 Bhakha and PW 4 Ballu and returned the amount to PW 1 with instructions to give the same to the appellants if they again demanded money.
At the same time he instructed PWs 2 and 4 to be with.
PW 1 so that they may witness the payment.
of the money.
Then PW 17 posted himself in a house near the house of PW 1.
On the evening of that day the first appellant came to the house of PW 1 and demanded the money.
He told PW 1 that the second appellant could not come as.
he was not well.
Then PW 1 took out the currency notes whose numbers had been noted down earlier and paid the same to the first appellant.
The first appellant put them in his pocket.
On receipt of that information, PW 17 came to the place and asked the first appellant to produce those currency notes.
On seeing PW 17, the first appellant became pale and nervous.
After some hesitation he took out the notes in question from his pocket and gave them to PW '17.
On examining their numbers it was found that they were the very notes which had been returned to PW 1 after noting their numbers.
As soon as the villagers came to know of the trap, several of them came forward with complaints against the, appellants.
After investigating all those complaints this case was launched.
It was tried by the special judge,, Balotra, who accepted the prosecution case in full and convicted the appellants under sections 161 and 120B, IPC and under section 5 (2) read with section 5 (1) (a) and 5(1)(d) of the Prevention of Corruption Act.
In appeal the High Court of Rajasthan affirmed the convictions of the appellants in respect of all the charges levelled against them.
It did not award any separate sentence in respect of the offence under section 161 or section 120 B, IPC.
As regards the other offences it reduced the sentence awarded by the trial court.
We shall now proceed to consider the evidence relating to the various charges levelled against the appellants.
It is not disputed that both the appellants were public servants.
So far as the evidence relating to the trap is concerned, we have the evidence of PWs 1,2,4 and 17.
Their evidence has been believed by the trial court as well, as the High Court.
The plea of the 1st appellant was that on that evening when he was going in front of the house of PW 1, PWs 1 and 192 2 and others caught hold of him and struggled with him; at that, time his note book fell down; thereafter he saw them producing the currency notes in question before PW 17.
This is a very artificial story.
The same has been disbelieved by the trial court as Well as, the appellate court.
No case is made out to interfere with their findings.
The evidence relating to the trap does not by itself connect the second appellant with that incident but then the evidence of PWs 1 and 3, which has been accepted by the trial court as well as the High Court, shows that it was the 2nd appellant who compelled PW 1 to give that amount.
The contention of the second appellant that he had incurred the displeasure of the their way of smuggling goods from Pakistan to India and from India to Pakisthan and therefore he 'was victimised was not,accepted either by the trial court or the High Court.
Those. courts also did not accept his version that several days before the trap was laid he had reported against 'most of the prosecution witnesses in this case.
The defence evidence led by him was disbelieved by those courts and even the documents produced by him were rejected either on the ground that they were got up for the purpose of this case or as having been tampered with.
This ' court being a court of special jurisdiction, does not interfere with, findings of facts reached by the High Court except under exceptional circumstances.
No such circumstance is available in this case.
We are unable to accept the contention of the Iearned coun sel for the appellants that PWs 1, 2, 3, 4 and 17 and,, other prosecution witnesses to whose evidence we shall presently refer, ' should be considered as accomplices and therefore their evidence is required to be corroborated in material particulars before being accepted.
On the proved facts, even those who gave illegal gratification to the appellants cannot be considered 'as accomplices as the same was extorted from them.
Though PWs 1, 2, 4 and 17 can be considered as interested.
witnesses as regards their evidence relating to trap, as a matter of law, it is not correct to say that their.
evidence cannot be accepted without corroboration, see the State of Bihar vs Baswan Singh(1).
The next incident is that spoken to by Bhoja PW 5 and Hussain, PW 6.
Their evidence was.
that on June 22, 1962 the ,second appellant along with the first appellant visited the shop of PW 5 and told, him that he was blackmarketing and that people ; 193 from Pakistan were visiting him.
He denied those charges.
Then the second appellant told him that unless he (PW 5) paid him Rs. 50 he would involve him in some case some day.
But still PW 5 did not give any money to the second appellant.
Then the second appellant insisted that he should give at least the wrist watch that he was wearing.
Finding no alternative her gave him the watch, article 3.
According to him when all these things happened PW 6 was in his shop.
PW 6 fully corroborated PW 5.
It was not denied that PW 17 seized the watch in question from the second appellant.
But his explanation was that that watch had been pledged by PW 5 with Shriram PW 4for Rs. 50 but that amount had been advanced to DW 4 by him (appellant No. 2); DW 4 left the watch with him and that is how he happened to be in possession of the watch.
Neither the trial court nor the appellant court accepted this version.
On the other hand they relied on.
the evidence of PWs 5 and 6 coupled with the, circumstance that the watch was seized from the second appellant.
We see no reason to disturb the findings reached by those courts.
PW 18 Ukaram spoke to the fact of having paid a sum of Rs. 101 to the second appellant in the presence of the first appellant on August 13, 1962.
Though his evidence was believed by the trial court, the same was not relied on by the High Court.
Therefore we exclude that evidence from consideration.
We next come to the evidence of PWs 8, 11 and 12.
PW 8 is one Kastura.
His evidence is that some days prior to October 1, 1962 the first appellant came and.
took him to the outpost.
There the second appellant accused him of being in the habit of visiting Pakistan.
When he denied that charge he was asked to kneel down.
Sometimes thereafter he was asked to pay Rs. 100.
As he had no money he was kept in the outpost during the night.
On the next morning Imam PW 11 and Bhakha PW: 2 happened to come to the post.
8, 11 and 12 pleaded with the second appellant to accept a lesser sum.
Ultimately, the second appellant agreed to receive Rs. 50.
Thereafter PW 1 1 was sent to the house of PW 8 to sell his goats and get Rs. 50.
He accordingly went to the village,, sold some goats of PW 8 and ' got Rs. 50.
During this incident, according to the evidence of the above witnesses, the first appellant was also present in the outpost.
Sadiq PW 13 speaks to the fact that about nine days prior to his arrest the first appellant went to his house and took him to the outpost saying that he was wanted by the second appellant.
There he was falsely accused of selling goats in Pakistan; then, he was beaten by the second appellant and thereafter he was.
told by the second appellant that he should pay him Rs. 100.
As, 194 he could not make the payment in question he was kept in the outpost that night.
Next day his brother Gafoor came there and paid a sum of Rs. 80 to the second appellant.
It is only thereafter he was allowed to go back.
At about the time when money was extorted from PW 13, Alladin PW 14 was said to have been in the outpost.
PW 14 corroborated the testimony of: PW 13.
PW 14 has his own grievance against the. appellants.
His case was that about 25 days prior his arrest, the first appellant ,came to his field and demanded his camel for cultivation of his field.
But as he himself required the camel he refused to give it.
After about 8 or 9 days both the appellants came to his field .and, forcibly took him to the outpost and beat him.
Thereafter, they demanded from him a sum of Rs. 60 and he was told that if he did not pay that amount, lie would be prosecuted in some false case.
Next we come to the evidence of Murad PW 7 and Subhan PW 9.
The evidence of these two witnesses was that about seven or eight days before the first appellant was arrested .
both the appellants came to their houses in the village Talab Ka Par and took them to the outpost.
There they were made to kneel down.
Further they were falsely accused of indulging in smuggling ,of goods and visiting Pakistan without valid permits.
Thereafter Rs.80 were demanded from PW 7 and Rs. 200 from PW 9.
Ultimately it was settled that PW 7 should pay Rs. 50 and PW 9 Rs. 150.
By that time Kalla PW 3 came there.
He was sent to .the house of those witnesses to get money.
He got Rs. 40 for PW 7 and Rs. 130 for PW 9.
Those, amounts were paid to the second appellant.
Next we come to the evidence of Minimal PW 10.
His version was that in July or August 1962 his brother in law died and in that connection a feast had been arranged.
When the feast was about to commence the first appellant came there and told him that unless he paid a sum of Rs. 100 he would not be allowed to have the feast.
As he refused to pay that money he was taken to the outpost.
There the second appellant again demanded from him Rs. 100.
Ultimately PW 10 paid the second appellant Rs. 30.
Lastly we come to the evidence of Nemichand PW 15.
His case was that about a month before the first appellant was trap ped he had come to his shop and told him that he should go and meet the second appellant at the outpost.
Accordingly he went to the outpost.
There the second appellant accused him of indulging in black marketing and demanded from him Rs. 100, and he was told that if he did not pay that amount he would be beaten and prosecuted.
Ultimately it was settled that he should 195 pay Rs. 50.
Thereafter he was allowed to go home and get the money.
On the next day he went to the outpost and paid Rs. 50 to the second appellant.
The evidence of all the witnesses mentioned above excepting PW 18 has been accepted by the trial court as well as by the appellate court, and we see no reason to differ from them.
This takes us to the question whether on the basis of the evidence accepted by the High Court both or any of the appellants could in law have been convicted for any of the offences with which they were charged.
The first appellant was a subordinate of the second appellant.
From the evidence referred to earlier it is clear that both the appellants were acting together.
It is obvious that the second appellant was mainly responsible for the extortions complained of and the first appellant was aiding him in his activities.
Hence there was no need to charge the appellants under section 120 B, IPC even in respect of the amount received from PW 1.
The evidence adduced by the prosecution shows that every single act complained of amounts to an extortion in law.
Before an offence is held to, fall under section 161 IPC, the following requirements have to be satisfied: (1) the accused at the time of the offence was, or expected to be, a public servant, (2) that he accepted, or obtained, or agreed to accept, or attempted to obtain from some person a gratification, (3) that such gratification was not a legal remuneration due to him, and (4) that he accepted the gratification in question as a motive or reward, for (a) doing or forbearing to do an official act; or (b) showing, or forbearing to show favour or disfavour to.
some one in the exercise of his official functions; or (c) rendering, or attempting to render, any service or disservice to some one, with the Central or any State Government or Parliament or the Legislature of any State, or with any public servant.
As mentioned earlier admittedly the appellants were public servants.
It is also established that they obtained from the several witnesses examined in this case illegal gratification.
The word 'obtain ' is a strong word.
It includes also things received by extortion.
But can it be said that they obtained the gratifications in question as a motive or reward for doing or for forbearing to do an official act or for showing or for forbearing to show favour or disfavour to the persons in question in the exercise of their official functions.
The evidence on record clearly shows that neither the appellants intended to, show any official favour to the persons from whom they extorted money or valuable things, nor those persons expected any official favour from them.
, They paid the amounts in question solely with a view to avoid being ill treated 196 or harassed.
The scope of section 161, IPC had been considered by this Court in State of Ajmer vs Shivji Lal(1) as well as in State Of Uttar Pradesh vs Kuljas Rai(2).
Though the former decision.
was overruled in certain respects by a later decision of this Court to which reference will be made hereinafter, that part of 'the decision which considered the requirements of section 161 I.P.C. was not differed from.
Therefore it is difficult to hold that the acts complained against the appellants can be held to constitute offences under section 161, IPC.
Before an offence can, be held to come within cl.
(a) of subs.
1 of section 5 of the Prevention of Corruption Act, the requirements of section 161, IPC have to be satisfied.
If an offence does not fall under section 161, IPC.
it cannot come.
within section 5(1)(a) of the Prevention of Corruption Act.
But so far as cl.
(d) of sub section 1 of section 5 of the Prevention of Corruption Act is concerned, that stands on a different footing.
At the relevant time that sub section read "A public servant is said to commit the offence Of criminal misconduct in the discharge of his duty . . . . . . (d) if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
Therefore if it is proved that the appellants had by illegal means or by otherwise abusing their position as public servants obtained for themselves money or other valuable things, then, they can be said to have committed the offence of criminal misconduct in the discharge of their official duties.
To bring home an offence under section 5 (1) (d), it is not necessary to prove that the acts complained of were done by the appellants in the discharge of their official duties.
The contrary view taken by this Court in State of Ajmer vs Shivji Lal(1) was over ruled by this Court in Dhaneshwar Narain Saxena vs The Delhi Administration(3).
In that case it was observed that the words occurring in section 5 of the Prevention of Corruption Act "in the discharge of his duty" do not constitute an essential ingredient of the offence under section 5 (1) (d), the ingredients of that offence being (1) that the accused should be a public servant, (2) that he should use some corrupt or illegal means or otherwise abuse his position as a (1) (1959) Supp. 2 S.C.R. 739.
(2) Cr.
Appeal 177 of 1960, decided on 22 8 62.
(3) ; 197 public; servant; (3) that he should have obtained a valuable thing or pecuniary advantage, and (4) for himself or any other person.
That decision was followed in State of Uttar Pradesh vs
Kuljas Rai(1).
It must be noted that clause 5 (1) (d) is much wider in scope than clause 5 ( 1 ) (a).
Therefore, the conviction of the, Appellants under section 5(1) (d) read with section 5(2) of the Prevention of Corruption Act stands on a firm ground.
It was contended on behalf of the State that if this Court holds that the conviction of the appellants under section 161, IPC and under section 5 (1 ) (a) of the Prevention of Corruption Act is,, not sustainable, their conviction may, be altered to one under section 384, IPC It was said that such an alteration cannot be said to prejudice the appellants though they were no charged and tried for that offence.
We have not thought it necessary to examine that question as in any event the appellants are liable to be convicted under section 5 (2) read with section 5 ( 1 ) (d) of the Prevention of Corruption Act.
In the result we partly allow the appeal and acquit the appellants under sections 120 B and 161, IPC, as well as under section 5 (2) read with section 5(1)(a) of the Prevention of Corruption Act.
The second appellants conviction under section 5(2) read with section 5 (1) (d) of the Prevention of Corruption Act is sustained and for that offence the sentence of 18 months rigorous imprisonment and a fine of Rs. 200, 'in default further imprisonment of two months imposed by the High Court is affirmed.
The conviction of the first appellant is altered to one under section 5(2) of the Prevention of Corruption Act read with section 114, IPC and for that offence he is sentenced to suffer rigorous imprisonment for one year.
Y.P. Appeal partly allowed.
(1) Cr.
Appeal 177 of 1960, decided on 22 8 62. | On the allegation that the appellant Havaldar and the second appellant a Subedar in the Rajasthan Armed Constabulary. were demanding certain amount from a person accusing him of indulging in blackmarketing and constantly visiting Pakistan and unless he paid the amount demanded he would be beaten and prosecuted, a police trap was successfully laid, and the appellants convicted under sections 161 and 120B I.P.C. and under section 5(2) read with section 5(1)(a) and section 5(1)(d) of the Prevention of Corruption Act.
In appeal, this Court.
HELD : The conviction of the appellants under section 120B and 161 as well as under section 5 (2) read with section 5 (1) (a) of the Prevention of Corruption Act must be set aside.
The second appellant 's conviction under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act must be sustained.
The first appellant 's conviction be altered to one under section 5(2) of the Prevention of Corruption Act read with section 114 I.P.C.
The first appellant was a subordinate of 'second appellant.
From the evidence it is clear that both the appellants were acting together.
It is ' obvious that the second appellant was mainly responsible for the extortions complained of and the first appellant was aiding him in his activities.
Hence there was no need to charge the appellants under section 120 B. I.P.C.
The evidence clearly showed that neither the appellants intended to show any official favour to the Persons from whom they extorted money nor those persons expected any official favour from them.
The amounts in question were paid solely with a view to avoid being ill treated or haras sed.
Therefore, it is dffficult to hold that the acts complained can be held to constitute offences under section 161 I.P.C. State of Ajmer vs Shivji Lal, [1959] Supp. 2 S.C.R. 739 and State of Uttar Pradesh vs Kuljas Rai.
A. No. 177 of.
1960 dated 22 8 62, referred to.
Before an offence can be held to come within section 5(1)(a) Of the Prevention of Corruption Act, the requirements of section 161 I.P.C., have to be satisfied.
If an offence does not fall under section 161 I.P.C. it cannot come.
within section 5(1)(a) of the Prevention of Corruption Act.
[196 C] But so far as section 5(1) (d) of the Prevention of Corruption Act is concerned, that stands on a different footing.
To bring home an offence under section 5(1) (d), it is not necessary to prove that the acts complained of were done by the appellants in the discharge of their official duties.
Clause 5(1)(d) is much wider in scope than cl.
5(1)(a).
[196 D 197 B] 190 State of Uttar Pradesh vs Kuljas Rai, Cr.
A. No. 177 of 1960 dated 22 8 62 and Dhaneshwar Narain Saxena vs The Delhi Administration, ; , referred to. |
minal Appeal No. 175 of 1967.
Appeal by special leave from the judgment and order dated May 17, 1967 of the Allahabad High Court, Lucknow Bench in Criminal Appeal No. 72 of 1967 and Capital Sentence Reference No. 9 of 1967.
section P. Sinha.
and M. I. Khowaja, for the appellants.
G. N. Dikshit and O. P. Rana,, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave by Ram Charan, Duila rey and Ram Bux is directed against the judgment of the Allahabad High Court, Lucknow Bench, confirming the convictions under section 302, read with section 34, I.P.C. Ram Charan and Dularey were sentenced to death while Ram Bux was sentenced to imprisonment for life.
355 The relevant facts in brief are as follows : On December 24, 1965, at about 8 a.m. four persons started for Lucknow on two cycles; Shanker Singh and Radhey Shyam were on one cycle and Surat Singh and Bachchu Lal on another.
Radhey Shyam had some business in Lucknow, including consulting Sri Pal Singh, Advocate, P.W. 20, regarding the preparation of a reply to a notice received by him.
After the work was finished the four left Lucknow.
It appears that Radhey Shyam was sitting on the carrier of the cycle driven by Shankar Singh, and Bachchu Lal was sitting on the carrier of the cycle driven by Surat Singh.
Radhey Shyam carried a leather bag in which he had kept money which he had received as the sale proceeds of jau sold by him in Lucknow.
For some reasons which need not be detailed, Shankar Singh and Radhey Shyam went ahead of Surat Singh and Bachchu Lal, and the distance between them when they came near about the scene of occurrence was, according to Surat Singh, between 1 1/2 and 2 furlongs.
When Shankar Singh and Radhey Shyam reached near the drain of Rastogi, they met Ram Charan, accused.
Radhey Shyam got down from the cycle and started walking with Ram Charan, while Shankar Singh followed a little behind.
Then the attack on Radhey Shyam took place and is described thus by Shankar Singh : "When we reached the grove of Durga Maharaj ' then Ram Bux and Dularey accused were sitting at the well.
Then Ram Charan by extending his hands (Kantiya Kar) caught hold of Radhey Shyam and threw him down on his face and after drawing his hands towards his back sat down catching him.
Dularey and Ram Bux came up running.
Dularey had a Banka and Ram Bux had a lathi.
Ram Charan told Dularey, 'Bring the Banka, why are you delaying it. ' Thereupon I cried out.
Then Dularey gave 5 6 7 Banka blows to Radhev Shyam on his neck.
As I was crying so Ram Charan saia 'Beat Thakurwa.
He will go to the village and tell that such and such persons had hacked Radhey Shyam. ' At this Ram Bux gave 5 6 Lathi blows to me.
By that time Surat Singh and Bachoo Mahraj also came there and Rupan also came.
" Surat Singh corroborates this statement.
He says that he saw all this from a distance of 1 'i furlongs.
Bachchu Lal, P.W. 7, also corroborates this version.
He says that on seeing the attack he and Surat Singh ran towards the scene of occurrence.
He further adds that when they were at a distance of about 30 35 paces, the accused ran away.
The First Information Report was lodged at the police station four miles from the scene of the occurrence at 17.30 hours by Shanker Singh.
356 The learned counsel for the appellants says that the First Information Report was written much later than the time men tioned above.
He relies first on the fact that the first page of the First Information Report was written very closely and the second page written not so closely.
He suggests that the draft was prepared sometime later and then it was copied into the Register in which first information reports are written; the writer having left only two pages for the report to be transcribed wanted to be quite certain that the report would finish in two pages.
This suggestion is, however, denied by Liaqat Hussain, P.W. 6, who was posted as Head Moharrir at the police station Kakori in 1965.
He says that he wrote on the first page of the report closely because he wanted that the whole matter should be completed on that page and that there was no other reason; after finishing the first page when he started writing on the second page then he did not write closely as the report had come to an end.
He denied the suggestion that two pages were left for writing this report.
This explanation seems to be true.
The special report of this case was sent, according to this witness, on December 24, 1965, at 7.55 p.m. through Abdul Rashid, Constable, who was called as Court Witness.
He says that he delivered the special report at the place of S.S.P. I at 9.10 a.m. on December 25, 1965.
The special report was sent to S.S.P. D.M., Additional S.P.C.O., S.D.M., and D.C.R.R.S. on Invoice Book at No. 54 which was exhibited in Court.
The learned counsel criticizes his evidence on the ground that there is no reason why he should have slept on the way.
The reason given by Abdul Rashid for breaking his journey on the way is that the ekka drivers and riksha drivers were charging too much.
In our view, there is no force in this contention of the learned counsel for the appellants.
The second ground of attack against the First Information Report is that the report itself discloses that it could not have been dictated by Shanker Singh.
He says that Shanker Singh was literate and yet the First Information Report bears his thumb mark.
He further says that it mentions the names of the fathers of Radhey Shyam, Ram Charan, Mata Pershad, Dayal, Lallu and Ram Bux, but in cross examination Shanker Singh admitted that he did not know the names of Ram Charan 's father and Rain Dayal 's father, and also he did not know the name of Ram Bux 's father.
He, however, further added in cross examination that at the time he gave the First Information Report, the names of the fathers of Ram Charan and Ram Dayal were then in his memory.
Another fact relied on by the learned counsel is that the First Information Report contains the word "sazish" while in cross examination Shanker Singh admitted that he did not know the meaning, of this word.
He urges that looking at all these circumstances it is clear that the First Information Report was either 357 written at the scene of occurrence after the Investigating Officer had gone there or that a draft was first written on a piece of paper some people supplying the names of the fathers of the various persons and suggesting words.
We are, however, unable to accede to this contention.
It may well be that the chowkidar who accompanied Shanker Singh supplied the name of the father of a particular person and the Head Moharrir may have substituted a word or two of his own, without changing the meaning.
The Investigating Officer went straightaway to the scene of the occurrence and started investigation.
None of these facts, in our opinion, cast doubt on the prosecution story.
It may be that Shanker Singh is able to sign but he put his thumb impression not only on the First Information Report but on his statement under section 164, Cr.
P.C., and this statement before the Committing Magistrate.
It may be that It was felt safer to have his thumb impression which he could not effectively deny later.
But the fact that the special report 'was sent on December 24, 1965, in the evening, dispels any doubt about the fact that the First Information Report was lodged at 5.30 p.m. on December 24, 1965.
Dealing with the eye witnesses, the learned counsel drew our attention to the endorsement which was made by the Magistrate who took down the statements under section 164, Cr.
Below he statements is appended a certificate in the following form "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.
" This certificate appears below the statements of Shanker Singh, Surat Singh and Bachchu Lal.
The learned counsel rightly suggests that the endorsement is not proper.
But we are unable to pay that it follows from this endorsement that any threat was given to these witnesses or that it necessarily makes the evidence given by the witnesses in Court suspect or less believable.
The learned counsel further relies on the following passage rom the judgment of Dhavle J., in Emperor vs Manu Chik(1) "There is yet another circumstance which calls for remark, and that is the examination, of Ladhu and Rebi among other witnesses under section 164, Criminal P.C. it was pointed out by Prinsep, J., in the well known case in Queen Empress vs Jadub Das(2) that a statement of a (1) A.I.R. 1938 Pat 290 295.
(2) 358 witness obtained under this section always raises a suspicion that it has not been voluntarily made, and that the section was not intended to enable the police, to obtain a statement from some person (in that case it was an incriminating statement) and as it were to put a seal on that statement by sending in that person to a Magistrate practically under custody, to be examined before the judicial inquiry or trial, and therefore compromised in his evidence when judicial proceedings are regularly taken.
" These observations were dissented from by the Andhra Pradesh High Court in In re : Gopisetti Chinna Venkata Subbiah(1) and Subba Rao, C.J., preferred the following observations of the, Nagpur High Court in Parmanand vs Emperor(1) "We are of the opinion that if a statement of a witness is previously recorded under section 164, Criminal Procedure Code, it leads to an inference that there was a time when the police thought the witness may change but if the witness sticks to the statement made by him throughout, the mere fact that his statement was previously recorded under section 164 will not be sufficient to discard it.
The Court, however, 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 witness, it can be acted upon.
" We agree with Subba Rao, C.J., that the observations of the learned Judges of the Nagpur High Court lay down the lay correctly.
In the result the appeal fails and is dismissed.
V.P.S. Appeal dismisses (1) I.L.R. (2) A.I.R. 1940 Nag. 340. | The statements of eye witnesses to a murder were recorded under section 164, Criminal Procedure Code, and a certificate was appended to each of the statements to the effect, that the deponent was warned that he was making the statement before a Magistrate and that it might be used against him.
On the question as to the weight to, be attached to the evidence given by the witnesses in court, HELD : It did not follow from the endorsement that any threat was given to the witnesses or that it necessarily made their evidence in court suspect or less believable.
[357 G] If a witness, in his evidence in court sticks to the version given by him in the statement under section 164, Cr.
P.C. the mere fact that the statement was previously recorded under the section is not sufficient to discard his .,evidence.
The only inference that can be drawn is that there, was a time when the police thought the witness may change his evidence.
The Court.
%however, ought to.
receive the evidence with caution.
[358 D] Observations in Parmanand vs Emperor, A.I.R. 1940 Nag. 340, 344 and In re : Gopisetti Chinna Venkatasubbialh.
, I.L.R. , 639.
approved.
Observations contra in Emperor vs Manu Chik, A.I.R. 1938 Patna 290, 295, disapproved. |
No. 528, of 1959.
Appeal from the judgment and order dated September 20, 1957, of the former Bombay High Court in I.T.R. No. 15 of 1957.
Hardayal Hardy and D. Gupta, for the appellant.
R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent.
635 1960.
November 24.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The Commissioner of Income tax, Bombay City 11, has filed this appeal with a certificate under section 66A(2) of the Income tax Act, against the judgment and order of the High Court of Bombay dated September 20, 1957, in Income tax Reference No. 15 of 1957.
The question referred to the High Court for its opinion by the Income tax Appellate Tribunal, Bombay was: "Whether the assessee is entitled to a deduction of Rs. 1,350 and Rs. 18,000 from his total income of the previous year relevant to the assessment years, 1953 54, 1954 55?" The assessee, Sitaldas Tirathdas of Bombay, has many sources of income, chief among them being property, stocks and shares, bank deposits and share in a firm known as Messrs. Sitaldas Tirathdas.
He follows the financial year as his accounting year.
For the assessment years 1953 54 and 1954 55, his total income was respectively computed at Rs. 50,375 and Rs. 55,160.
This computation was not disputed by him, but he sought to deduct therefrom a sum of Rs. 1,350 in the first assessment year and a sum of Rs. 18,000 in the second assessment year on the ground that under a decree he was required to pay these sums as maintenance to his wife, Bai Deviben and his children.
The suit was filed in the Bombay High Court (Suit No. 102 of 1951) for maintenance allowance, separate residence and marriage expenses for the daughters and for arrears of maintenance, etc.
A decree by consent was passed on March 11, 1953, and maintenance allowance of Rs. 1,500 per month was decreed against him.
For the account year ending March 31, 1953 only one payment was made, and deducting Rs. 150 per month as the rent for the flat occupied by his wife and children, the amount paid as maintenance under the decree came to Rs. 1,350.
For the second year, the maintenance at Rs. 1,500 per month came to Rs. 18,000 which was claimed as a deduction.
636 No charge on the property was created, and the matter does not fall to be considered under section 9(1)(iv) of the Income tax Act.
The assessee, however, claimed this deduction on the strength of a ruling of the Privy Council in Bejoy Singh Dudhuria vs Commissioner of Income tax (1).
This contention of the assesses was disallowed by the Income tax Officer, whose decision was affirmed on appeal by the Appellate Assistant Commissioner.
On further appeal, the Tribunal observed: "This is a case, pure and simple, where an assessee is compelled to apply a portion of his income for the maintenance of persons whom he is under a personal and legal obligation to maintain.
The Income tax Act does not permit of any deduction from the total income in such circumstances.
" The Tribunal mentioned in the statement of the case that counsel for the assessee put his contention in the following words: "I claim a deduction of this amount from my total income because my real total income is whatever that is " computed, which I do not dispute, less the maintenance amount paid under the decree.
" The assessee appears to have relied also upon a decision of the Lahore High Court in Diwan Kishen Kishore vs Commissioner of Income tax(2).
The Tribunal, however, referred the above question for the opinion of the High Court.
The High Court followed two earlier decisions of the same Court reported in Seth Motilal Manekchand vs Commissioner of Income tax (3) and Prince Khanderao Gaekwar vs Commissioner of Income tax (4), and held that, as observed in those two cases, the test was the same, even though there was no specific charge upon property so long as there was an obligation upon the assessee to pay, which could be enforeed in a Court of law.
In Bejoy Singh Dudhuria 's case (1), there was a charge for maintenance created against the assessee, and the Privy Council had observed that the income must be deemed to have never reached that assessee, (1) (3) (2) (4) 637 having been diverted to the maintenance holders.
In the judgment under appeal, it was held that the income to the extent of the decree must be taken to have been diverted to the wife and children, and never became income in the hands of the assessee.
The Commissioner of Income tax questions the correctness of this decision and also of the two earlier decisions of the Bombay High Court.
We are of opinion that the contention raised by the Department is correct.
Before we state the principle on which this and similar cases are to be decided, we may refer to certain rulings, which illustrate the aspects the problem takes.
The leading case on the subject is the decision of the Judicial Committee in Bejoy Singh Dudhuria 's case(1).
There, the stepmother of the Raja had brought a suit for maintenance and a compromise decree was passed under which the stepmother was to be paid Rs. 1,100 per month, which amount was declared a charge upon the properties in the hands of the Raja, by the Court.
The Raja sought to deduct this amount from his assessable income, which was disallowed by the High Court at Calcutta.
On appeal to the Privy Council, Lord Macmillan observed as follows: "But their Lordships do not agree with the learned Chief Justice in his rejection of the view that the sums paid by the appellant to his step mother were not 'income ' of the appellant at all.
This in their Lordships ' opinion is the true view of the matter.
When the Act by Section 3 subjects to charge 'all income ' of an individual, it is what reaches the individual as income which it is intended to charge.
In the present case the decree of the court by charging the appellant 's whole resources with a specific payment to his step mother has to that extent diverted his income from him and has directed it to his stepmother; to that extent what he receives for her is not his income.
It is not a case of the application by the appellant of part of his income in a particular way, it is rather the allocation of a sum out of his revenue before it becomes income in his hands." (1) 81 638 Another case of the Privy Council may well be seen in this connection.
That case is reported in P. C. Mullick vs Commissioner of Income tax, Bengal (1).
There, a testator appointed the appellants as executors and directed them to pay Rs. 10,000 out of the income on the occasion of his addya sradh.
The executors paid Rs. 5,537 for such expenses, and sought to deduct the amount from the assessable income.
The Judicial Committee confirmed the decision of the Calcutta High Court disallowing the deduction, and observed that the payments were made out of the income of the estate coming to the hands of the executors and in pursuance of an obligation imposed upon them by the testator.
It observed that it was not a case in which a portion of the income had been diverted by an over riding title from the person who would have received it otherwise, and distinguished the case in Bejoy Singh Dudhuria 's case (2).
These cases have been diversely applied in India, but the facts of some of the cases bring out the distinction clearly.
In Diwan Kishen Kishore vs Commissioner of Income tax (3), there was an impartible estate governed by the law of primogeniture, and under the custom applicable to the family, an allowance was payable to the junior member.
Under an award given by the Deputy Commissioner acting as arbitrator and according to the will of the father of the holder of the estate and the junior member, a sum of Rs. 7,200 per year was payable to the junior member.
This amount was sought to be deducted on the ground that it was a necessary and obligatory payment, and that the assessable income must, therefore, be taken to be pro tanto diminished.
It was held that the income never became a part of the income of the family or of the eldest member but was a kind of a charge on the estate.
The allowance given to the junior member, it was held, in the case of an impartible estate was the separate property of the younger member upon which he could be assessed and the rule that an allowance given by the head of a Hindu coparcenary to its members by way of maintenance was liable to be assessed (1) (2) (3) 639 as the income of the family, had no application.
It was also observed that if the estate had been partible and partition could have taken place, the payment to the junior member out of the coparcenary funds would have stood on a different footing.
In that case, the payment to the junior member was a kind of a charge which diverted a portion of the income from the assessee to the junior member in such a way that it could not be said that it became the income of the assessee.
In Commissioner of Income tax, Bombay vs Makanji Lalji (1), it was stated that in computing the income of a Hindu undivided family monies paid to the widow of a deceased coparcener of the family as maintenance could not be deducted, even though the amount of maintenance had been decreed by the Court and had been made a charge on the properties belonging to the family.
This case is open to serious doubt, because it falls within the rule stated in Bejoy Singh Dudhuria 's case (2); and though the High Court distinguished the case of the Judicial Committee, it appears that it was distinguished on a ground not truly relevant, namely, that in Bejoy Singh Dudhuria 's case (2) the AdvocateGeneral had abandoned the plea that the stepmother was still a member of the undivided Hindu family.
It was also pointed out that this was a case of assessment as an individual and not an assessment of a Hindu undivided family.
In Commissioner of Income tax, Bombay vs D. R. Naik (3), the assessee was the sole surviving member of a Hindu undivided family.
There was a decree of Court by which the assessee was entitled to receive properties as a residuary legatee, subject, however, to certain payments of maintenance to widows.
The widows continued to be members of the family.
It was held that though section 9 of the Income tax Act did not apply, the assessee 's assessable income was only the balance left after payment of the maintenance charges.
It appears from the facts of the case, however, that there was a charge for the maintenance (1) (2) (3) 640 upon the properties of the assessee.
This case also brings out correctly the principles laid down by the Judicial Committee that if there be an overriding obligation which creates a charge and diverts the income to some one else, a deduction can be made of the amounts so paid.
The last case may be contrasted with the case reported in P. C. Mullick and D. C. Aich, In re(1).
There, under a will certain payments had to be made to the beneficiaries.
These payments were to be made gradually together with certain other annuities.
It was held that the payments could only be made out of the income received by the executors and trustees from the property, and the sum was assessable to income tax in the hands of the executors.
It was pointed out that under the wilt it was stated that the amounts were to be paid "out of the income of my property", and thus, what had been charged was the income of the assessees, the executors.
The case is in line with the decision of the Privy Council in P. C. Mullick vs Commissioner of Income tax, Bengal(2).
In Hira Lal, In re,(3) there was a joint Hindu family, and under two awards made by arbitrators which were made into a rule of the Court, certain maintenance allowances were payable to the widows.
These payments were also made a charge upon the property.
It was held that inasmuch as the payments were obligatory and subject to an overriding charge they must be excluded.
Here too, the amount payable to the widows was diverted from the family to them by an overriding obligation in the nature of a charge, and the income could not be said to accrue to the joint Hindu family at all.
In Prince Khanderao Gaekwar vs Commissioner of Income tax (4), there was a family trust out of which two grandsons of the settlor had to be paid a portion of the income.
It was provided that if their mother lived separately, then the trustees were to pay her Rs. 18,000 per year.
The mother lived separately, and two deeds were executed by which the two grandsons agreed to pay Rs. 15,000 per year to the mother, (1) (3) (2) (4) 641 and created a charge on the property.
The sons having paid Rs. 6,000 in excess of their obligations, sought to deduct the amount from their assessable income, and it was allowed by the Bombay High Court, observing that though the payment was a voluntary payment, it was subject to a valid and legal charge which could be enforced in a Court of law and the amount was thus deductible under section 9(1)(iv).
There is Do distinction between a charge created by a decree of Court and one created by agreement of parties, provided that by that charge the income from property can be said to be diverted so as to bring the matter within section 9(1)(iv) of the Act.
The case was one of application of the particular section of the Act and not one of an obligation created by a money decree, whether income accrued or not.
The case is, therefore, distinguishable from the present, and we need not consider whether in the special circumstances of that case it was correctly decided.
In V. M. Raghavalu Naidu & Sons vs Commissioner of Income tax (1), the assessees were the executors and trustees of a will, who were required to pay maintenance allowances to the mother and widow of the testator.
The amount of these allowances was sought to be deducted, but the claim was disallowed.
Satyanarayana Rao and Viswanatha Sastri, JJ. distinguished the case from that of the Privy Council in Bejoy Singh Dudhuria (2).
Viswanatha Sastri, J. observed that the testator was under a personal obligation under the Hindu law to maintain his wife and mother, and if he had spent a portion of his income on such maintenance, he could not have deducted the amount from his assessable income, and that the position of the executor was no better.
Satyanarayana Rao, J. added that the amount was not an allowance which was charged upon the estate by a decree of Court or otherwise and which the testator himself had no right or title to receive.
The income which was received by the executors included the amount paid as maintenance, and a portion of it was thus applied in discharging the obligation.
(1) (2) 642 The last cited case is again of the Bombay High Court, which seems to have influenced the decision in the instant case.
That is reported in Seth Motilal Manekchand vs Commissioner of Income tax(1).
In that case, there was a managing agency, which belonged to a Hindu joint family consisting of A, his son B and A 's wife.
A partition took place, and it was agreed that the managing agency should be divided, A and B taking a moiety each of the managing agency remuneration but each of them paying A 's wife 2 as. 8 pies out of their respective 8 as.
share in the managing agency remuneration.
Chagla, C. J. and Tendolkar, J. held that under the deed of partition A and B had really intended that they were to receive only a portion of the managing agency commission and that the amount paid to A 's wife was diverted before it became the income of A and B and could be deducted.
The learned Judge observed at p. 741 as follows: "We are inclined to accept the submission of Mr. Kolah that it does constitute a charge, but in our opinion, it is unnecessary to decide this question because this question can only have relevance and significance if we were considering a claim made for deduction under section 9(1)(iv) of the Income tax Act where a claim is made in respect of immovable property where the immovable property is charged or mortgaged to pay a certain amount.
It is sufficient for the purpose of this reference if we come to the conclusion that Bhagirathibai had a legal enforceable right against the partner in respect of her 2 annas and 8 pies share and that the partner was under a legal obligation to pay that amount.
" These are the cases which have considered the problem from various angles.
Some of them appear to have applied the principle correctly and some, not.
But we do Dot propose to examine the correctness of the decisions in the light of the facts in them.
In our opinion, the true test is whether the amount sought to be deducted, in truth, never reaches the assessee as his income.
Obligations, no doubt, there are in every case, but it is the nature of the obligation which is the (1) 643 decisive fact.
There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee.
Where by the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow.
It is the first kind of payment which can truly be excused and not the second.
The second payment is merely an obligation to pay another a portion of one 's own income, which has been received and is since applied.
The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, not as part of his income, but for and on behalf of the person to whom it is payable.
In our opinion, the present case is one in which the wife and children of the assessee who continued to be members of the family received a portion of the income of the assessee, after the assessee had received the income as his own.
The case is one of application of a portion of the income to discharge an obligation and not a case in which by an overriding charge the assessee became only a collector of another 's income.
The matter in the present case would have been different, if such an overriding charge had existed either upon the property or upon its income, which is not the case.
In our opinion, the case falls outside the rule in Bejoy Singh Dudhuria 's case and rather falls within the rule stated by the Judicial Committee in P. C. Mullick 's case For these reasons, we hold that the question referred to the High Court ought to have been answered in the negative.
We, accordingly, discharge the answer given by the High Court, and the question will be answered in the negative.
The appeal is thus allowed with costs here and in the High Court.
Appeal allowed. | A consent decree was passed against the assessee awarding maintenance to his wife and children.
The decree did not create any charge upon the income of the assessee.
The assessee claimed in the assessment of income tax deduction of the amount paid under the decree from his total income.
Held, that the assessee was not entitled to the deduction.
Where by the obligation income was diverted by an overriding title before it reached the assessee, it was deductible; but where the income was required to be applied to discharge an obligation after such income reached the assessee, it was not deductible.
The true test was whether the amount sought to be deducted, in truth, never reached the assessee as his income.
In the present case, the wife and children of the assessee received a portion of the income of the assessee, after the assessee had received the income as his own.
Bejoy Singh Dudhuria vs Commissioner of Income tax, (1933) I I.T.R. 135, not applicable.
P. C. Mullick vs Commissioner of Income tax, Bengal, , applied.
Diwan Kishen Kishore vs Commissioner of Income tax, , Seth Motilal Menekchand vs Commissioner of Income tax, , Prince Khanderao Gaekway vs Commissioner of Income tax, , Commissioner of Income tax, Bombay vs Makanji Lalji, , Commissioner of Income tax, Bombay V. D. R. Naik, , D. C. Aich, It; re, , Hira Lal, In re, and V. M. Raghavalu Naidu & Sons vs Commissioner of Income tax, , referred to |
82 of 1959.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
519 section K. Kapur, Jai Gopal Chagnani, K. K. Jain and B. P. Maheshwari, for the petitioners.
C. K. Daphtary, Solicitor General of India, G. C. Kasliwal, Advocate General, Rajasthan and D. Gupta, ' for the respondent.
March 22.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is a petition under article 32 of the Constitution.
The petitioners, who are seven in number, challenge as unconstitutional and ultra vires certain provisions of the Rajasthan Passengers and Goods Taxation Act, 1959, the Rajasthan Passengers and Goods Taxation Rules, 1959, and a notification issued under R. 8.
For brevity, we will refer to them in this judgment, as the Act, the Rules and the notification respectively.
The first petitioner is a registered firm, petitioners Nos. 2 to 6 are the partners of that firm, and petitioner No. 7 is the General Manager of the firm.
Petitioner No. 7 holds a public carrier permit for the whole of Rajasthan in his individual name.
The petitioners also hold 59 stage carriage permits from the Regional Transport Authority, Jodhpur, for diverse routes over roads which have different kinds of surfaces, some being sandy or katcha and others, metalled., tarred, etc.
The Act was passed in 1959 for levying a tax on passengers and goods carried by road in motor vehicles.
The power to enact the Act purports to be derived from Entry No. 56 of the State List in Sch.
VII to the Constitution, which reads: "156.
Taxes on goods and passengers carried by road or on inland waterways.
" The Act received the assent of the President on April 27, 19.59, and was published in the Rajasthan Gazette on April 30, 1959.
The same day, the Rules framed in exercise of the powers conferred by section 21 of the Act were also published, and the notification was also issued.
The Rules were subsequently amended, and we are concerned with the Rules, as amended.
Before we deal with the case further, it is convenient to see how the Act is constructed and what the 520 Rules and the notification provide.
The Act, which consists of 21, sections, came into force in the whole of the State of Rajasthan on May 1, 1959.
The Act contains the usual provisions to be found in all taxing statutes about appeals, revision, offences and penalties, power to compound offences, recovery of tax as arrears of land revenue, bar of proceedings, exclusion of the jurisdiction of Civil Courts, refunds and power to make rules, to which detailed reference need not be made. ' We are only concerned with the imposition of the tax and the mode of its recovery, and will refer to those provisions which are relevant.
Section 3 is the charging section, and section 4 deals with the method of collection of the tax.
Since these sections are the main subject of attack, we quote them in full: "3.
Levy of tax. (1) There ' shall be levied, charged and paid to the State Government, a tax on all fares and freights in respect of all passengers carried and goods transported by motor vehicles 'at such rate not exceeding one eighth of the value of the fare or freight, in the case of cemented, tarred, asphalted, metalled, gravel and kankar roads and not exceeding one twelfth of such value in other cases, as may be notified by the State Government from time to time subject to a minimum of one naya paisa in any one case, the amount of tax being calculated to the nearest nays paisa.
Explanation.
When passengers are carried and goods are transported by a motor vehicle, and no fare or freight has been charged, the tax shall be levied and paid as if such passengers were carried or goods transported at the normal rate prevalent on the route.
(2) Where any fare or freight charged is a lump sum paid by a person on account of a season ticket or as subscription or contribution for any privilege, right or facility which is combined.
with the right of such person being carried or his goods transported by a motor vehicle without any further payment or at a reduced charge, the tax shall be levied on the amount of such lump sum or on such amount as appears to the prescribed authority to be fair and 521 equitable having regard to the fare or freight fixed by a competent authority under the Motor Vehicles Act, 1939(Central Act 4 of 1939).
(3) Where passengers are carried or goods transported by a motor vehicle from any place outside the State to any place within the State, or from any place within the State to any place outside the State, the tax shall be payable in respect of the distance covered within the State at the rate laid down in sub section (1) and shall be calculated on such amount as distance covered in the State bears to the total distance of the journey: Provided that where passengers are carried or goods transported by a motor vehicle from any place within the State to any other place within the State through the intervening territory of another State, the tax shall be levied on the full amount of the fare or freight payable for the entire journey and the owner shall issue a single ticket or receipt, as the case may be, accordingly.
(4) Method of collection of tax.
The tax shall be collected by the owner of the motor vehicle and paid to the State Government in the prescribed manner: Provided that in case of public carriers the State Government may accept a lump sum in lieu of the tax chargeable on freight in the manner prescribed: Provided further that in case of contract carriages the State Government may accept a lump sum in lieu of the tax chargeable on fare in the manner prescribed.
" Section 5 lays down the method of levy, and enjoins the issuance of a ticket showing the tax paid of a receipt showing the freight charged and the tax paid.
It includes a proviso that in the case of passengers the tax becomes chargeable only on entry in the State, if the journey began outside the State.
Section 6 requires the owner to keep accounts and to submit periodic returns and provides for levy of penal ties in case of failure, which penalties are laid down in section 8.
Section 7 deals with the appointment of taxing authorities, and a. 12 gives the power of entry the 522 officers into vehicles, garages, and offices for inspection and checking.
Section 10 enjoins upon the owners the duty of furnishing tables of fares and freights, time tables,, etc.
Section 9 enables the State Government to grant to any person or class of persons,.
exemption from all or any of the provisions of the Act.
The Rules prescribe those matters which are required under the Act to be prescribed by the Rules.
It is not necessary to refer to them beyond Rules 8 and 8 A, which have been challenged.
Rule 8(i) prescribes the method of payment of tax by means of stamps to be affixed to the tickets, and the second proviso is to the following effect: "Provided further that the tax payable under the Act on fare by the owner of a motor cycle, rickshaw or a motor cab shall be paid to the State Government in lump sum, of which the amount shall be fixed by the State Government from time to time by, Notification in this behalf." Rule 8(ii) then provides: "The owner of a public carrier shall pay to the State Government a lump sum in lieu of the tax ,chargeable under the Act on freight and the amount of such lump sum shall be fixed by the State Government from time to time by Notification in this behalf.
" Rule 8 A, in so far as material to this case, reads: "Provisions for payment of lump sum in lieu of tax on fare or freight.((1) In cases covered by the second.
proviso to sub rule (1) of rule 8 and by subrule (ii) of that rule the lump sum fixed by the State Government as payable in lieu of the tax on fare or freight, as the case may be, shall be deposited in cash into a Government Treasury or a Sub Treasury in equal quarterly instalments payable within 15 days from the 31st day of March, the 30th day of June, the 30th day of September and the 31st day of December every year; and in case of such vehicles not registered in Rajasthan to the incharge of the check post or barrier at the time of their entry into the State of Rajasthan or to the officer of the Excise and Taxation Department nearest to the point of 523 entry into the State and having jurisdiction over that area: Provided that Provided that (a) for the quarter ending on the 30th day of June ', 1959, such payment shall be made for the months of May and June, 1959, at the rate of 1/12 of the said sum for each month, (b) where the owner has not plied his vehicle for the entire quarter immediately preceding any of the aforesaid dates a proportionate decrease in the amount due for that quarter may be made, (c) if the owner ceases to ply his vehicle on a date preceding any of the aforesaid dates, the proportionate amount for the quarter shall be paid by him immediately upon such cessation, and (d) where the owner has not plied his vehicle for a continuous period of not less than three months and produces a certificate from the authority competent under the Rajasthan Motor Vehicles Taxation Act, 1951, or the rules made thereunder to the effect that he has been refunded the tax for that period under section 7 of the said Act, no amount by way of tax under the Act shall be payable for such period.
(2) The owner shall inform the Assessing Authority as soon as his vehicle goes out of use.
When the vehicle is again put on the road, an intimation to that effect shall be sent to the Assessing Authority immediately.
" The notification which was issued under R. 8 prescribing lump sum rates, is as follows: "Jaipur, April 30, 1959 No. F. 15(5) E & T/59.
In pursuance of rule 8 of the Rajasthan Passengers and Goods Taxation Rules, 1959, the Government of Rajasthan hereby directs that the tax chargeable on fare or freight in respect of the following cl.
was of Motor Vehicles, shall be paid in lump sum of which the amount is mentioned opposite each such class: 3.
Public carriers (Goods Vehicles): (a) Holding a general permit under the , to use all roads in Rajasthan; 524 (i) Load carrying capacity below 5 Tons Rs. 420 per annum.
(ii) Load carrying capacity 5 Tons and above .
Rs. 540 per annum.
(b) Holding a permit under the , for plying within the limits of any region or on fixed routes in any one region: (i)Load carrying capacity below 5 Tons .
Rs. 360 per annum.
(ii) Load carrying capacity 5 Tons and above Rs. 480 per annum.
"4 Public Carriers (Goods Vehicles) plying on hire on temporary permits under the . (b) Public Carriers (Goods Vehicles) d(i) Load carrying capacity below 5 Tons .
Rs. 2 for each calendar day (ii) Load carrying capacity 5 Tons and above.
Rs. 4 for each calendar day This shall have effect on and from the 1st May, 1959" The petitioners challenged the Act, the Rules and the notification from many angles, in the petition; but at the hearing before us, the arguments were more restrained.
The main objection to the Act is that the tax has not been laid upon "passengers and goods" as authorised by Entry No. 56 but upon "fares and freights", which are different entities, and in support of the contention that there is a difference, reference is made to Entry No. 89 of the Union List, where power is conferred to tax "fares and freights".
It is submitted that a tax on fares and freights being a different tax, cannot be levied under the Entry, and thus, the tax is without authority of law.
The Act and the Rules are further challenged on the grounds that they are repugnant to articles 301 and 304 as being a restriction upon inter State trade, commerce and intercourse, to article 19 as involving an unreasonable restriction upon the business of the petitioners, and also to article 14 as discriminating between this mode of transport and the Railways.
The Act is further challenged on the ground that it concedes to the State 525 Government the power to fix the amount of lump sum payment without guidance.
The rates and lump sum payment are challenged because they involve discrimination between routes involving roads of different surfaces.
Rules 8 and 8 A and the notification are challenged as, it is submitted, they go beyond the Act by making the lump sum payment compulsory, even though under the Act it is optional, and involve payment of tax even when no passengers or goods are transported.
Lastly, it is said that by making tax payable even though the route between two intra State point passes outside the State, the Act has an extra territorial operation which is ultra vires the legislature.
The first and the 'Main contention is that the Act in the guise of taxing passengers and goods, taxes really the income of the petitioners, or, at any rate, fares and freights, and is thus unconstitutional.
It is argued that the tax is borne by the operators because of competition with the Railways.
That the petitioners are required to bear the tax themselves to stand competition with the Railways is a matter of policy ', which the petitioners follow and is not something which flows inevitably from the provisions of the Act.
We do not agree that the Act, in its pith, and substance, lays the tax upon income and not upon passengers and goods.
Section 3, in terms, speaks of the charge of the tax "in respect of all passengers carried and goods transported by motor vehicles", and though the measure of the tax is furnished by the amount of fare and freight charged.
it does not cease to be a tax on passengers and goods.
The Explanation to section 3(1) lays down that even if passengers are carried or goods transported without the charge of fare or freight,, the ' tax has to be paid as if fare or freight has been charged.
This clearly shows that the incidence of the tax is upon passengers and goods, though the amount of the.
tax is measured by the fares and freights.
A similar argument was not accepted by the Madras High Court in Mathurai vs State of Madras (1), and the same view was expressed in Atma Ram Budhia vs State of Bihar (2).
In our opinion, the charging section does (1) I.L.R. (2) (1952) I.L.R 31 Pat 493 (S.B.).
526 not go outside Entry No. 56.
The tax is still on passengers and goods, though what it is to be is deter,mined by the amount of fare or freight.
It is clear that if the tax were laid on passengers irrespective of the distance travelled by them, it would lead to anomalies if the amount charged be the same in every case.
This if; additionally clear in the case of goods where the weight, bulk or nature of the goods may be different, and a scale of payments must inevitably be devised.
Though the tax is laid on passengers and goods, the amount varies in the case of passengers according to the distance travelled, and in the case of goods because the freight must necessarily differ on account of weight, bulk and nature of the goods transported.
The tax, however, is still a tax on passengers and goods, and the argument that it is not so, is not sound.
We are also of opinion that no inter State trade, commerce or intercourse is affected.
The tax is for purposes of State, and falls upon passengers and goods carried by motor vehicles within the State.
No doubt, it falls upon passengers and goods proceeding to or from an extra State point but it is limited only to the fare and freight proportionate to the route within the State.
For this purpose, there is an elaborate scheme in R. 8 A to avoid a charge of tax on that portion of the route which lies outside the State.
There is thus no tax on fares and freights attributable to routes outside the State except in one instance which is contemplated by the proviso to sub a.
(3) of section 3 and to which reference will be made separately.
In our opinion, the levy of tax cannot be said to offend articles 301 and 304 of the Constitution.
The next contention is that the Act allows an option to pay a lump sum in lieu of the tax, but Rules 8 and 8 A and the notification make the payment of the lump sum compulsory.
There is no doubt that ex facie the two provisos to a. 4 employ language which is permissive, while the two Rules and the notification employ language which is imperative.
The two provisos to a. 4 are enabling, and thereby authorise the State Government to accept a lump sum payment in lieu of the tax actually chargeable.
The 527 word "accept" shows that the election to pay a lump sum is with the taxpayer, who may choose one method of payment or the other.
The inclusion of such a provision is designed to promote easy observance of the Act and also its easy enforcement.
The charge of tax calculated on fares and freights involves difficulties for the operators who have to keep accounts and also difficulties for the taxing authorities, who have to maintain constant checks and inspections.
The lump sum payment is a convenient mode by which an amount is payable per year irrespective of whether the tax would be more or less if calculated on actual fares or freights.
The operators pay the lump sum if they so choose, to avoid having to maintain accounts and to file returns, and the Government accepts it to avoid having to inspect accounts and to keep a check.
The rates which are prescribed for a lump sum payment per year are for those who wish to avail of them.
It is, however, contended that though the section creates an option, the Rules and the notification make the payment compulsory, and attention is drawn to the word "shall" used both in Rules 8 and 8 A and the notification, whereas the words in the two provisos to section 4 are "may accept".
The word "shall" is ordinarily mandatory, but it is sometimes not so interpreted if the context or the intention otherwise demands.
In re Lord Thurlow Ex Parte Official Receiver (1), Lord Esher, M. R., observed at p. 729 that "the word 'shall ' is not always obligatory.
It may be directory", and Lopes L. J., at p. 731 added: "It is clear that the word 'shall ' is not always used in a mandatory sense.
There is abundance of authority to the contrary in cases where it has been held to be directory only".
It was thus that the word 'shall ' was held to be directory only, in that case, by Coutts Trotter, C. J., in Manikkam Pattar vs Nanchappa Chettiar (2), by Russel, J., in In re Rustom (3), by Venkatasubba Rao, J., (1) (1895) 1 Q.B 724 (2) (3) Bom.
396; 528 in Jethaji Peraji Firm vs Krishnayya (1) and by the Judicial Committee in Burjore and Bhavani Pershad V. Mussumat Bhagana (2).
Now, Rules 8 and 8 A and the notification only lay down what lump sum payment has to be in each case, if a lump sum is being paid.
The mandatory language is used to fix peremptorily the amount of the lump sum.
Rules 8 and 8 A and the notification cannot be said to overreach the section to which they are subordinate and from which they must take their colour and meaning.
If the Act creates an option, it cannot be negatived by the Rules.
The Act and the Rules must be read harmoniously, and reading them so, it is plain that the apparent mandatory language of the Rules and the notification still retains the permissive character of the section, but only lays down what the amount of the lump sum must be, if lump sum payment is made in lieu of payment of the tax calculated on actual fares and freights.
If the two Rules and the notification are read in this way, the mandatory language is limited to the prescribing of the lump sum rates.
In our opinion, the two Rules and the notification are not void and contradictory of the Act.
It is contended that the power to fix lump sums in lieu of tax has been conferred upon Government without guidance, and is, therefore, unconstitutional.
It is also urged that the levy of a lump sum leads to the result that even if passengers or goods are not transported, the tax is still payable.
These arguments, in our opinion, cannot be accepted.
The learned Advocate General pointed out that the lump sum rates work out at a very low figure, the minimum being less than Re. 1/ per day and the maximum, Rs. 1.50 nP. per day.
The rates are no doubt very reasonable, but this hardly meets the argument of the petitioners.
There are, however, good reasons for upholding the fixation of lump sums.
The payment of the lump sum is not obligatory, and a person can elect to pay tax calculated on actual fares and freights.
(1) (1929) I.L.R , 656.
(2) (1883) L.R. 11 I. A. 7.
529 The fares and freights are fixed by competent authority under the , and that takes into account the average earnings, and the lump sum is fixed as an average of what tax would be realised if calculated on actual fares and freights.
There is no compulsion for any operator to elect to pay a lump sum if he does not choose to do so.
Nor is the argument that there may be.
vacant periods when no passengers or goods are transported but the tax is payable, is of any force, because there may be days when the business done might result in tax in excess of the lump sum payable.
The lump sum figure is based on averages, and cannot be impeached by reference to a possibility that on some days no business might be done.
The next contention that there is discrimination between road transport and rail transport is also without force.
The entry in the State List is limited to a tax on passengers and goods transported by road or inland waterways.
, The comparison with Railways is not admissible, because tax on railway fares and freights is a Union subject, and is not available to the State Legislature.
There is thus a clear classification made by the Constitution itself.
No discrimination between operators of public motor vehicles using roads has been pointed out, and all operators are equally affected by the, Act.
Some manner of support for the argument was sought from section 9, where the State Government is empowered to grant exemption from the Act by general or specific order to any person or class of persons.
But we were informed that no exemption has been granted except to hospitals or charities.
It is next urged that the imposition of a higher rate of tax for cemented, tarred, asphalted, metalled, gravel and kankar roads than that for other roads discriminates between operator, This argument overlooks the very object and purpose of a tax.
As is well known, taxes are burdens or charges imposed by legislative power upon persons or property to raise money for public purposes.
The power to tax is thus 67 530 indispensable to any good government, and the imposition of the tax is justified on the assumption of a return in the shape of conveniences.
If this be the true import of a tax, it is but natural that taxes will be graded according as they involve more or less of such conveniences.
They will be heavy in case of roads requiring greater expenditure to construct and to maintain, than in case of roads not requiring such expenditure.
All operators using the better kind of roads have to pay the heavier tax, and there is no discrimination between them as a class.
Discrimination can only be found if it exists between persons who are comparable, and there is no comparison between persons using the better kind of roads and those who use roads which are not so good.
It is the cost of construction and maintenance which makes the difference in the tax, and no case of discrimination can be said to be made out.
The last contention is that the proviso to sub section
(3) of section 3 is extra territorial in nature, because it makes the tax payable on fares and freights attributable to the territory of another State when the route passes through such territory, even though the journey starts and ends in Rajasthan.
We were informed that now there are no such routes, but even otherwise, such portions must have been very short and negligible.
No affidavit was sworn to show how many such routes were involved and what their extent was, and in view of lack of adequate averments, we must reject the contention.
In the result, the petition fails, and is dismissed with costs.
Petition dismissed. | The petitioners who were partners of a registered firm hold ing public carrier and stage carriage permits challenged the constutionality of certain provisions of the Rajasthan Passengers and Goods Taxation Act, 1959, the Rajasthan Passengers and Goods Taxation Rules, 959, and a notification issued under r. 8.
The Act was passed for levying a tax on passengers and goods 518 carried by road in motor vehicles the power to enact being derived from Entry 56 of the State List in Sch.
VII of the Constitution.
Section 3(4) of the Act prescribed the method of collection of the tax and provided that the State Government may accept a lump sum in lieu of the tax chargeable".
Rule 8(i) prescribed the method of payment and provided that the tax "shall be paid in lump sum" and the notification in question prescribed the rates of the tax.
Held, that the incidence of the tax was upon "passengers and goods" and not upon income of the petitioners though the amount of the tax was measured by the fares and freights.
The charging section, namely, section 3 did not go outside Entry 56.
Mathurai vs State of Madras, I.L.R. , Alma Ram Budhia vs State of Bihar, Pat. 493, referred to.
The tax did not offend articles 301 and 304 of the Constitution and no inter State trade, commerce or intercourse was affected by it.
Although the tax fell upon passengers and goods proceeding to or from an extra State point, it was limited only to the fare and freight proportionate to the route within the State.
The word "shall" is ordinarily mandatory but it is sometimes interpreted as directory, and in the present case the word "shall" used in rr. 8 and 8A and the notification should be interpreted as directory as section 4 of the Act from which the Rules and the notification derive their authority, creates an option by using the words "may accept".
The Act, the Rules and the notification must be read harmoniously.
The mandatory language was used to fix peremptorily the amount of the lump sum if paid in lieu of the tax.
In Re Lord Thurlow Ex Parte Official Receiver, (1895) 1 Q.B. 724, Mannikam Patter vs Nanchappa Chettiar, (1928) M.W.N. 441, In re Rustom, 369, jethaji Peraji Firm v: Krishnayya, Mad.
648 and Burjore and Bhavant Pershad vs Mussumat Bhagana, (1883) L.R. II I.A. 7, followed.
The lump sum figure was based on averages and could not be impeached by reference to a possibility that on some days no business might be done.
Comparison with Railways which is a union subject was not admissible.
There was no discrimination between operators of public motor vehicles using roads all of whom were affected by the Act, There could be no comparison between persons using better kind of roads and those using roads which were not so good.
All operators using better kind of roads had to pay heavier tax, and there was no discrimination between them as a class. |
minal Appeal No. 134 of 1965.
Appeal by special leave from the judgment and order dated May 14, 1965 of the Patna High Court in Government Appeal No. 25 of 1962.
Nur ud din Ahmed and A. K. Nag, for the appellant.
D. P. Singh, Anil Kumar and Shivpujan Singh, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the Patna High Court allowing the appeal filed by the State Government, and convicting the appellant, Mohd. Usman, under section 5 (3) (a) of the Indian (IV of 1884) hereinafter referred to as the Act and sentencing him to undergo rigorous imprisonment for two years and also to pay a fine of Rs. 2,000, in default to undergo rigorous 429 imprisonment for a further period, of six months.
The High Court, however, agreed with the Magistrate that the appellant could not be held guilty under section 304A, IPC.
The High Court did not find the two other accused persons, Abdul.
Rahinan and Abdul Aziz, guilty, and State appeals against them were dismissed.
The prosecution case, in brief, is that an explosion occurred in appellant 's factory at Matkuria, PS Dhanbad, on April 28, 1960.
As a result of the explosion Kashi Bhokta, Gobardhan Bhokta and Mohan Bour died.
On that day, the appellant, who manufactures fireworks, had allowed minors (under 16 years of age), viz., Kashi Bhokta, Guhi Bhokta Gobardhan and Subhas Chamar to work in the manufacture of fireworks, thus contravening r. 16 of the Explosives Rules, 1940 hereinafter referred to as the Rules made under the Act, and had thereby committed an offence punishable under section 5 (3) (a) of the Act.
The High Court, disagreeing with the Magistrate who tried the case, held that "the three minor boys, Kashi, Guhi and Subhas, were employed and Gobardhan, in any event, was allowed to enter the premises licensed under the Rules for manufacture of explosives" in contravention of r. 16, and convicted the appellant as already stated.
Section 5(3) of the Act reads thus: "Any person contravening the rules made under this section shall be punishable (a) if he imports or manufactures any explosive in such contravention, with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both; (b) if he possesses, uses, sells or transports any explosive in such contravention with imprisonment for a term which may extend to two years, or with fine which may extend to three thousand rupees, or with both; and (c) in any other case, with fine which may extend.
to one thousand rupees.
" Rule 16 of the Explosives Rules provides: "16.
Children and intoxicated persons, No child under 16 years of age and no Person who is in a state of intoxication shall be employed on the loading, unloading or transport of explosives, or be employed in or allowed to enter any premises licensed under these rules.
" 430 The first question which arises is whether every breach of r. I6 falls under section 5 (3) (a), of the Act.
In our opinion, the answer is in the negative.
It will be noticed that cl.
(a) of section 5 (3) deals with a person who imports or manufactures in contravention of the; Rule, cl.
(b) deals with a person who posses uses, sells or transports any explosive in contravention of the Rules and cl.
(c) deals with contraventions of the Rules in other.
It seems to us that the scheme of this sub section is to divide the contravention of the Rules into three categories.
In the first category fall rules which person must observe while he imports or manufactures.
In other words, rules relatable to the import or manufacture.
of explosives would fall in the first category.
For example, clause 11 ' of the licence issued to the "Not more than four persons shall be allowed at any one time in any one building or tent in which the explosive is being manufactured and only persons actually employed in manufacturing or superintending manufacture shall be allowed inside the place of manufacture.
" Clause 12 of the Licence provides: "No iron or steel implements shall be used in the manufacture.
only copper gun metal or wooden tools are permissible.
" Now, if the appellant had infringed the provisions of the clauses it could be said that the contravention would fall under cl.
(a) of section 5(3).
We may mention that r. 81 provides that "no explosive shall be manufactured, possessed used or sold except under and in accordance with the conditions of a licence granted under these rules", and a breach of the, conditions would be contravention of r. 81.
But suppose the appellant had contravened clause 2 of the licence his licence is for the manufacture, possession and sale of 25 pounds of fireworks which prescribes the modes in which the explosives shall be kept in the premises, i.e. "(a) in a building, substantially constructed of brick stone or concrete or in a securely I constructed fire proof safe; or (b) in an excavation formed in solid rock or earth. he would be guilty under cl.
(b) 'of section 5(3) and not cl.
(a) of section 5(3).
Similarly, a contravention of clause 18, which provides that "all sales of explosives under this licence must be effected on the premises described on the face of the licence, and an explosive shall not be sold to 'any person under the age of 16 years" would fall under cl.
(b) of section 5 (3).
The learned counsel for the appellant contends that on the facts found by the High Court the conviction of the appellant 431 under cl.
(a) of section 5(3) cannot be sustained.
He says that there is no finding or evidence that the four minors were engaged to manufacture or were taking part in the manufacture of fireworks.
We have gone through the evidence and we find that no witness states that these minor boys were employed by the appellant to manufacture fireworks.
Subhas Chamar, P.W. 1, says that he "was working in the workshop of explosives at Matkuria owned by Usman .
We were working in the normal manner and in the same place at the time of occurrence.
" Puran Bhokta, P.W. 2, father of Kashi and Gobardhan, says that all his sons "worked in the explosive workshop of Matkuria owned by Usman.
" He does not enlighten us about the nature of work done by his sons.
Guhi Bhokta, P.W. 8, only states that "about 18 months ago, on a Thursday, I was working in the explosive shop in village Matkuria under the supervision of Rahman accused.
There is no other evidence bearing on this point.
From this evidence it cannot be definitely inferred that the four minors were actually employed in the manufacture of explosives on April 28, 1960.
In fact, there is no evidence at all that any fireworks were being manufactured that day.
It was for the prosecution to prove all the ingredients of the offence, and section 106 of the Evidence Act does not, as contended by the learned counsel for the State, absolve the prosecution from proving its case.
There is no doubt that there has been a contravention of r. 16, inasmuch as the four minors were employed in or allowed to enter the premises licensed under the Rules.
But r. 16 is, a comprehensive rule and applies to employment of minors in the premises for various purposes manufacture and sale of explosives it would also apply to employment of a minor to sweep floors and keep the premises clean.
If a minor is employed to keep clean the premises, would this contravention fall under cl.
(a) cl.
(b) or cl.
(c) of section 5(3)? It seems to us that if cl.
(a) and cl.
(b) are read widely so as to cover every activity which might take place on the premise cl.
(c) would be rendered redundant.
This is not a permissible way of reading statutes.
If will be noticed that the legislature regards an offence under cl.
(a) of section 5(3) to be more serious than one under cl.
(b) and an offence under cl.
(b) to be more serious than one under cl.
Further, the rules are many; some regulate minor matters, and if would be absurd to treat the breach of every rule to be a breach of cl.
(a) or cl.
In our opinion, if there is a breach of a rule, it has to be ascertained in each case whether the rule or part of it relates to activities mentioned in cl.
(a) of section 5(3) or cl.
(b) of section 5(3).
If it does not relate to any of the activities mentioned in cl.
(a) 432 or cl.
(b) of section 5 (3), the breach of the rule would fall under cl.
(c) of section 5 (3).
In this case the prosecution has not proved that the four minors were employed in any of the activities mentioned in cl.
(a) or cl.
(b) of section 5 (3).
Nor has it proved that any manufacture of fireworks was done on April 28, 1960.
It follows that the contravention of r. 16, on the facts found, can only come under cl.
(c) of section 5 (3).
We may mention that the learned counsel for the appellant challenged the findings of fact made by the High Court, but, in our opinion, they are not vitiated in any manner.
In the result, the appeal is partly :allowed.
The conviction is altered to one under cl.
(c) of section 5 (3) of the Act, and the.
appellant is sentenced to pay a fine of Rs. 1,000 and in default to undergo rigorous imprisonment for a period of three months.
Fine, if paid in excess, shall , be refunded.
Y.P. Appeal partly allowed. | The appellant, a manufacturer of fireworks was convicted under section 5 (3) of the Indian as he had allowed minors to work in the manufacture of fireworks thus contravening r. 16 of the Explosives Rules.
HELD: Clause (a) of section 5(3) deals with a person who imports or manufactures in contravention of the Rules; el.
(b) deals with a person who possesses, uses, sells or transports any explosive in contravention of the Rules; and el.
(c) deals with the contravention of the Rules in other cases.
If there is a breach of a rule, it has to be ascertained in each case whether the rule or part of it relates to activities mentioned in el.
(a) of section 5(3) or el.
(b) of section 5(3).
If it does not relate to any of the activities mentioned in el.
(a) or cl(3)(b) of section 5(3) the breach of the rule would fall under cl.
(c) of section 5(3) .
[430 A B; 431 H] In this case, though it was established that the minors were employed in or allowed to enter the premises, it was not proved that the minors were employed in any of the activities mentioned in el.
(a) or el.
(b) of section 5(3).
Nor it has been proved that any manufacture of fireworks was done on that day.
So the contravention of r. 16 on the facts found, could only be punishable under el.
(e) of section 5(3).
[432 B] |
minal Appeal No. 109 of 1967.
Appeal by special leave from the judgment and order dated May 4, 1967 of the Patna High Court in Criminal Appeal No. 455 of 1965.
Debobrata Mookherjee and P. K. Ghosh, for the appellant.
D, P. Jha, for the respondent.
565 The Judgment of the Court was delivered by Hegde, J.
In this appeal by special leave, Mr. Debabrata Mookherjee learned counsel for the appellant advanced the following contentions : (1) the investigation conducted in this case was without the authority of law, (2) the nature of the onus under section 4 of the Prevention of Corruption Act has been wrongly construed by the High Court as well as the trial court, and (3) the sanction granted under section 6 of the Prevention of Corruption Act is invalid in law as the authority who granted the same had no competence to do so.
The facts leading upto this appeal are these.
The appellant was an assistant medical officer in the railway hospital at Gaya in the year 1964.
PW 4 Doman Ram was a khalasi working under the inspector of works, Eastern Railway, Gaya.
On March 2, 1964, as he was suffering from dysentery and stomach pain he was sent to the appellant along with a sick note for treatment.
The case of PW 4 was that when he went to the appellant for treatment the appellant demanded and received, from him Rs. 2 as illegal gratification for treating him.
Thereafter he was.
treated by the appellant on the 5th, 7th.
9th and 12th of that month.
By the 12th he had completely recovered and, therefore he wanted to rejoin duty and for that purpose he requested the appellant to give him a fitness certificate.
For issuing him that certificate the appellant demanded Rs. 5 as bribe and he further told PW 4 that unless he paid him the said sum by March 14, 1964, he (appellant) would remove PW 4 's name from, the sick list.
After this talk, when PW 4 was going out of the hospital he met a person by name Babu.
He complained to Babu about the behavior of the appellant.
The said person told him that he would meet him again on March 14, 1964, but on March 14 Mr. A. C. Das PW 17, Inspector of Special Police Establishment met PW 4 in his house and ascertained from him all that had happened.
Thereafter PW 4 met PW 17 again at the railway station as desired by the latter.
From there both of them went to the district Dak bungalow where PW 17 recorded the complaint of PW 4.
The same day PW 17 obtained from the First Class Magistrate an order under section 5A of the Prevention of Corruption Act.
Thereafter, PW 4 produced before PW 17 a five rupee currency note in the presence of panch witnesses.
PW 17 noted the number of the currency note in question, prepared a memorandum in respect of the same, got it attested by the panch witnesses and thereafter returned the said currency note to PW 4 to be given to the appellant in case he made any further demand for bribe.
After these preliminaries were over PW 4 went to the appellant along with the panch witnesses.
There when PW 4 asked for the certificate, the appellant repeated his earlier demand.
Then PW 4 gave him the currency note in question.
This was seen by the panch 566 witnesses.
Immediately signal was given to PW 17 who came to the hospital and.
asked the appellant to produce the five rupee note received by him from PW 4.
At this stage the appellant became extremely nervous.
He admitted that PW 4 had paid him Rs. 5 but that according to him was a return of the loan given to him by the appellant.
He produced the currency note in question.
After investigation the appellant was charged under section 161 IPC and section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act.
The plea of the appellant was that PW 4 and his wife were doing odd jobs in his house; PW 4 was a drunkard and hence was always in need; he used to often borrow from him (appellant); he had borrowed Rs. 5/ from him some.
days prior to the date of the trap and he returned that amount on that day.
The appellant examined some witnesses in support of that plea.
The trial court as well as the High Court accepted the prosecution evidence; rejected the defence version and convicted the appellant both under section 161, IPC as will as section 5(2) of the Prevention of Corruption Act.
They have given good reasons in support of the findings of fact reached by them.
As this Court does not go into questions of fact except under exceptional circumstances, Mr. Mookherjea primarily confined himself to the legal issues arising in the case.
His first contention was that the investigation held in this case was without the authority of law and hence the.
appellant is entitled to be acquitted.
He urged that in view of section 5A of the Prevention of Corruption Act, PW 17 who was only an Inspector of police could not have investigated the case without the prior permission of a magistrate of the first class; on March 12, 1964 he merely applied for and obtained from a first class magistrate permission to lay a trap; the permission to, investigate the case was obtained by him only on the 21st but by that time the entire investigation was over; hence there was no valid investigation.
The application made by PW 17 on the 12th was under section 5A of the Prevention of Corruption Act Therein, it is true, he had only asked for permission to lay a trap.
It must be remembered that the permission given was one under section 5A. A permission under that provision is a permission to investigate the case.
Laying the trap is a part of the investigation.
It is so laid down by this Court in State of Madhya Pradesh vs Mubarak Ali().
An investigation is one and indivisible.
[ All steps taken by PW 17 to ascertain the truth of the complaint made by PW 4 alleging that the appellant was attempting to obtain bribe from him, come within the expression 'investigation ' under section 4(1) of the Code of Criminal Procedure. 'Investigation ' includes all the proceedings (1) [1959] 2 S.C.R.201.
567 under the Code for the collection of evidence conducted by a police officer or any person (other than a magistrate) who is authorised by a magistrate in this behalf.
The scope of the expression 'investigate ' found in section 5A of the Prevention of Corruption Act was explained by this Court in H. N. Rishbud and Inder Singh vs State of Delhi( ) and State of Uttar Pradesh vs Bhagwant Kishore Joshi(2).
Section 5A does not contemplate two sanctions, one for laying the trap, and another for further investigation.
Once an order under that provision is made that order covers the entire, investigation.
A permission given under that provision enables the officer concerned not only to lay a trap but also to hold further investigation.
There is no doubt that PW 17 was under a mistaken impression that he should obtain two permissions, one for laying the trap and another for investigating the case.
Evidently because of that he applied for a second permission Rome days after the trap was laid.
But that permission was wholly superfluous and the same does not affect the validity of the earlier order.
Hence there is no basis for the contention that any portion of the investigation in this case was done without the authority of law.
It was next urged that before granting the permission the learned magistrate did not apply his mind to the question whether there was any need for granting the sanie.
Before permitting PW 17 he should, have first ascertained whether any officer of the rank of Deputy Superintendent or above was not immediately available to investigate the case, and whether 'there was any other reason for departing from the normal rule laid down by the legislature, namely, that cases of this nature should be investigated by officers of the rank of Deputy Superintendent of Police or above.
It was further contended on behalf of the appellant that the earned magistrate made the order casually he gave no reason in support of his order and hence the permission granted does not meet the requirements of the law.
The object of the legislature in enacting section 5A was to see that the investigation of offenses punishable under sections 161, 165 or 165A, IPC as well as those under section 5 of the Prevention of Corruption Act should be done ordinarily by officers of the rank of deputy superintendent or above N4 doubt section 5A also provides for an alternative procedure.
An officer below the rank of deputy superintendent can investigate those: offenses if he obtains the previous permission of a first class magistrate.
The legislature proceeded on the basis that except for good reasons the magistrate would not accord permission for officers below the rank of a deputy superintendent to investigate those offenses.
But exigencies of administrative convenience may require I that some of those (1) ; (2) ; 568 cases have to be investigated by officers below the rank of Deputy Superintendents.
For that reason it was provided that ' in such circumstances the permission of a. magistrate of the first class should be obtained.
This Court has laid down in State of Madhya Pradesh vs Mubarak Ali( ') that the statutory safeguards under section 5A must strictly be complied with for they are.
conceived in public interest and were provided as a guarantee against frivolous and vexatious proceedings.
A magistrate, can not surrender his discretion to a police officer but must exercise it having regard to the relevant material made available to him at the stage of granting permission.
He must also be satisfied that there is reason owing to exigencies of the administrative convenience to entrust a subordinate officer with the investigAtion.
It is further observed therein that it is desirable that the order giving the permission should ordinarily on the face of it disclose the reasons for giving permission.
The order giving permission under section 5A in this case does not give any reason.
On the application submitted by PW 17 the learned magistrate merely ordered "Permission granted".
PW 17 did not mention in his application any special reason for permitting him to investigate the case unless we consider the statement in the application "Today is the date fixed for issuing the fit certificate: after receiving a bribe money of Rs. 5 from him" as impliedly a ground in, support of his application.
It is surprising that even after this Court pointed out the significance of section 5A in several decisions there 'are still some magistrates and police officers who continue to act in a casual manner.
It is obvious that they are ignorant of the decisions of this Court.
But the legality of the investigation held in this case does not appear to have been challenged in the trial court.
The charge leveled against the appellant is established by satisfactory and therefore all that we have now to see is whether the accused was prejudiced by the fact that investigation of this case was made by an officer below the rank of a Deputy Superintendent, as laid down by this Court in Munnalal vs State of Uttar PradeSh(2) and State of Uttar Pradesh vs Bhagwant Kishore Joshi(3).
No prejudice was pleaded much less established An illegality committed in the course of an investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceed to termination the invalidity of the preceding investigation does not vitiate "the result unless the miscarriage of justice has been caused thereby, See Rishbud and Inder Singh vs State of Delhi(4).
We next take up the question as to the, scope of section 4 of the Prevention of Corruption Act.
As, mentioned earlier, the appel (1) (2) ; (3) ; (4) (1955] 1 S.C.R. 1150.
569 lant admits the fact that he received a sum of Rs. 5 from PW 4 on March 14, 1964.
Once that fact is admitted by him, the court has to presume unless the contrary is proved by the appellant that he accepted the sum in question as a motive or reward for issuing the fit certificate.
Mr. Mookherjea 's contention was that the presumption in question does not arise unless the prosecution proves that the amount in question was paid as a bribe.
He urged that the presumption under section 4 arises only when the prosecution proves that the Appellant had received "any gratification (other than legal remuneration) or any valuable thing from any person".
He laid stress on the Word gratification ' and according to him the word 'gratification ' can only mean something that is given as a corrupt reward.
If this contention of Mr. Mookherjea is correct then the presumption in question would become absolutely useless.
It is not necessary to go into this question in any great detail as the question is no more res Integra.
In C.I. Emden vs
State of U.P. (I") this Court held that the "presumption under section 4 arose when it was shown that the Accused had received the stated amount and that the, said amount Was not legal remuneration.
The word 'gratification ' in section 4(1) was given its literal dictionary meaning of satisfaction of appetite or desire; it could not be construed to mean money paid by way of a bribe.
" The Court further observed "If the word 'gratification ' is construed to mean money paid by way of a bribe then it would be futile or superfluous to prescribe for the.raising of the presumption.
Technically it may no doubt be suggested that the object which the statutory presumption serves on, this construction is that the court may then presume that the money was paid by way of a bribe as a motive or reward as required by section 161 of the Code.
In our opinion this could not have been the intention of the Legislature in prescribing the; statutory presumption under section 4(1).
In the context we see no justification for not giving the word 'gratification ' its literal dictionary meaning.
There is another consideration which supports this construction.
The presumption has also to be raised when it is shown that the accused person has received valuable thing.
This clause his reference to, the offence punishable under s, 165 of the Code; and there is no doubt that one of the essential ingredients, of the said offence is that the valuable things should have been received by the accused without consideration or for a not be suggested that the relevant clause in section 4(1) (1) ; 570 which deals with the acceptance of any valuable thing should be interpreted to impose upon the prosecution an obligation to prove not only that the valuable thing has been received by the accused but that it has been received by him without consideration or for a consideration which he knows to be inadequate.
The plain meaning of this clause undoubtedly requires the presumption to be raised whenever it is shown that the valuable thing has been received by the accused without anything more.
If that is the true, position in respect of the construction of this part of section 4(1) it would be unreasonable to, hold that the word gratification ' in the same clause imports the necessity to prove not only the payment of money but the incriminating character of the said payment.
It is true that the Legislature might have used the word money ' or 'consideration ' as has been done by the relevant section of the English statute; but if the dictionary meaning of the word 'gratification ' fits in with the scheme of the section and leads to the same result as the meaning of the word valuable thing ' mentioned in the same clause, we see no justification for adding any clause to qualify the word 'gratification '; the view for which the appellant contends in effect amounts to adding a qualifying clause to describe gratification.
" The same view was taken by this Court in Dhanvantrai Balwantrai Desai vs State of Maharashtra(1) and again in V. D. Jhangan vs State of Uttar Pradesh(2).
It was next contended that to discharge the burden placed on the appellant under section 4 all that he has to do is to offer a reasonable explanation, the burden placed on him by section 4(1) being somewhat analogous to that 'Placed on an accused under section 114 of the Evidence Act.
This branch of the law is also well settled by the decisions of ' this Court.
Section 114 of the Evidence Act provides that the court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.
Under that provision the court is not bound to draw any presumption of fact. 'It is within its discretion to draw a presumption or not.
But under s, 4(1) the court is bound to draw the presumption mentioned therein. ',The presumption in question will hold good unless the accused proves the contrary.
In other words, the burden of proving the contrary is squarely placed on the accused.
A fact is said to be when after Considering the matters before it the court either believes it to exist or con (1) A.T.R. (2) ; 571 siders its existence was so probable that a prudent man ought under the circumstances of the particular case to act upon the supposition that it exists.
The proof given by the accused must satisfy the aforementioned conditions.
If it does not satisfy those conditions then he cannot be said to, have proved the contrary.
In Dhanvantrai Balwantrai vs State of Maharashtra( ') this Court considered the nature of the proof required to be given by ' the accused under section 4 (I).
Therein this, Court held that the burden resting on the accused person in such a case would not be as light as that placed on him under section 114 of the Evidence Act and the same cannot be held to be discharged merely by reason of the fact that the explanation offered by him is reasonable and prob able.
It must further be shown that the explanation is a true one.
The words 'unless the contrary is proved ' which occur in that provision make it clear that the presumption has to be rebutted by proof and not by a bare explanation which is merely plausible.
The same view was taken by this Court in V. D. Jhangan vs State of Uttar Pradesh (2).
But at the same time it was mentioned in that decision that the burden resting on the accused will be satisfied if the accused person establishes his case by a preponderance of probability and it is not necessary for him to establish his case by the test of proof beyond reasonable doubt.
In other words, the, nature of the burden placed on him is not the same as that placed on prosecution which must not only prove its case but prove it beyond reasonable doubt.
In the instant case the evidence adduced by the appellant in support of his plea was not accepted by the trial court as well as the High Court.
Hence it must be held that he had not discharged the burden placed on him by law. ' This takes us to the last point urged by Mr. Mookherjea namely that the sanction to prosecute granted by PW 1, the chief medical officer, under section 6(1) of the Prevention of Corruption Act is invalid as he was not the authority competent to remove the appellant from his office and hence the prosecution is vitiated.
Section 6(1), to the extent it is material for our present purpose, reads : "No court shall take cognizance of an offence punishable under section 161 or section 164 or section 165 of the Indian Penal Code, or Under sub section (2) or sub section 3A of section 5 of this Act, alleged to have been committed by a public servant, except with the previous sanction, (a). . . . . (b). . . . . (c) in the case of any other person, of the authority competent to remove him from his office." (1) A.I.R. 1964 S.C. 575.
L7 Sup.
CI/68 12 (2) ; 572 This Court has laid down in R. R. Chari vs State of U.P.(1); as well as in several other decisions that no court can validly take cognizance of any of the offenses mentioned in section 6(1) of the Prevention of Corruption Act without the previous sanction of the authority competent to remove from office the accused.
Without a valid sanction the court had no jurisdiction to try the case.
Hence, if the sanction accorded in: this case is invalid then the appellant is entitled to be acquitted.
P.W. I deposed that the appellant was a class III officer and that he could have been appointed or dismissed by the Deputy Agent Personnel who is subordinate to him.
Therefore he (P.W. 1) was competent to grant previous sanction under section 6 (1) of the Prevention of Corruption Act.
P.W. 1 's assertion that the appellant could have been removed from 'his office either by the Deputy Agent Personnel or by himself was challenged in his cross examination.
The trial court as well as the High Court have relied on the oral evidence of P.W. 1 in coming to the conclusion that the sanction granted is valid.
In our opinion those courts erred in relying on oral evidence in deciding the validity of the sanction granted.
Hence, we asked the learned counsel for the respondent to satisfy us with reference to the rules on the subject that P.W. 1 was competent to remove the appellant from his office.
For this, ,purpose we granted him several adjournments.
Though our attention has now been invited to some rules, those rules do not establish that P.W. I as competent to grant the sanction in question.
It was contended on behalf of.
the appellant that he was a gazetted officer and therefore he could be removed only by the Railway Board.
This contention does not appear to be correct.
As seen from the Government of India, Ministry of Railways publication under the title "authorised scales of pay", the appellant is a class HI officer.
From that publication it is further seen that F only class I and II officers are designated as gazetted officers.
In support of his contention that he was a gazetted officer, the ap pellant relied on the Railway Board 's letter No. PC/60/PS 5/MH3 dated 2 3 1962. 'Paragraph 4 of that letter the only relevant paragraph for our present purpose says that an assistant surgeon after five years service shall hold the honorary gazetted rank and shall be entitled to the usual privileges granted to gazetted officers in matters such as passes, allotment of quarters.
This letter merely indicates that the officers mentioned therein are entitled to certain privileges which are ordinarily available to gazetted officers.
We are unable to 'read that letter as raising the rank of the appellant to that of a gazetted officer.
Therefore we proceed on the basis that the appellant was a non gazetted officer.
But the question still remains whether P.W. 1 was competent to remove him (1) ; 573 from service.
In view of appendix 3 8 of the Indian Railways Establishment Code Vol.
III (4th re print, dated 26 7 1962), we may take it that P.W. 1 was the head of the department to which the appellant belongs.
The next question is whether the head of his department was competent to remove the appellant from his service.
As per r. 134 of the Indian Railway Establishment Code, pub lished in 1959, authorities competent to make first appointment to non gazetted posts in the Indian Railways are the General Manager, the Chief Administrative Officer or lower authority to whom he may delegate power.
There is no evidence to show that this power has been delegated to the heads of the department.
No provision in the Indian Railway Establishment Code 1959 prescribing the authorities competent to remove from office a class III officer was brought to our notice.
But the prefatory note to Vol.
I of the Code says, "The revised Chapter XVII and revised Appendices I and XII will be printed later for inclusion in this edition.
Till such times these are printed, the rules and provisions contained in Chapter XVII and Appendices IV and XVIII in the 1951 Edition (Reprint) as, amended from time to time shall continue to apply." In 1961 new rules relating to discipline and appeal of railway servants other than employed in the railway protection force have been published.
Rule 1701 says, "Without prejudice to the provisions of any law, for the time being in force, relating to the conduct of Government servants, or to the rules made under section 47 (e) of the Indian Railways Act, 1890 (9 of 1890), the conduct of railway servants shall be governed by the rules contained in Appendix Vlll.
" Our attention has not been invited to any rules made under section 47 (e) of the Indian Railways Act, 1890 or any other statutory rules.
Hence we are proceeding on the basis that the aforementioned r. 1701 governs the present case.
Rule 1705 says that the authorities who are competent to place a railway servant under suspension and to impose penalties on him are specified in the Schedules 1, II and III appended to the Rules.
Rule 1707 sets out the various punishments that may be imposed on a railway servant which includes removal from service as well as dismissal from service.
Schedule I deals with railway servants employed in the Railway Board 's office, the Research, Design and Standard Organisation, the Railway Staff College, Baroda, the Advanced Permanent Way Training School, Poona, the Railway Service Commission, the Railway Rates Tribunal, the Railway Liaison Office and all other railway offices which are not enumerated above.
Schedule I does not apply to the case of railway servants employed in the zonal railways.
As regards them, provision is made in Sch.
From that Schedule it is seen that though a head of the Department can impose on Class III officers 574 censure as well as some other punishments detailed therein, he is not competent to impose on them the punishment of removal from service, compulsory retirement or dismissal from service.
Those punishments, as seen from the Schedule,can be imposed on them only by thE appointing authority or any other higher authority.
P.W. 1 is not shown to be the appointing authority.
On the material before us it is not possible to come to the conclusion that P.W. 1 was competent to grant sanction under section 6 (1)of the Prevention of Corruption Act.
We accordingly allow this appeal and set aside the conviction of the appellant.
He is on bail.
His bail bond stands cancelled.
V.P.S. Appeal allowed. | The appellant was an assistant medical officer in a railway hospital at Gaya.
Though he had certain privileges ordinarily available to gazetted officers he was only a non gazetted Class III officer.
He was convicted for offenses tinder section 161 I.P.C. and 'section 5 (2) read with section 5 (I) (d) of the Prevention of Corruption Act, 1947.
The complaint that he had received illegal gratification, was investigated into by an Inspector of Police.
The Inspector obtained permission from a First Class Magistrate for laying a trap, investigated into the case, and later, after the entire investigation was over, he obtained permission from the Magistrate to investigate into, the case.
The sanction to prosecute required under section 6(1) of the Act, was granted by the Chief Medical Officer, who was the bead of the department.
The conviction was challenged on the following grounds : (1) The investigation was without authority of law, because, under section 5A, the Inspector could not have investigated without the prior permission of a Magistrate of the First Class; (2) The permission granted by the Magistrate did not meet the requirements of law because, it was given casually and without applying his mind to the question as to whether there was any need for departing from the normal rule laid down in the section, namely, that such cases should ordinarily be investigated by an officer of the rank of Dy.
Superintendent of Police or above and there should be good reasons before a Magistrate accords permission to officers below that rank; (3) The presumption under section 4 that the appellant had accepted the sum a motive or reward should not be drawn unless the prosecution proved that the amount was paid as a bribe; (4) The presumption was rebutted by the appellant 's explanation that what was paid to him was the return of a loan; and (5) the sanction to prosecute granted by the Chief Medical Officer was invalid as lie was not the authority competent to remove him.
HELD : (1) There is no basis for the contention that any portion of ' the investigation was done without authority by law.
[567 D].
Investigation under section 4(1) Cr.
P.C. is one and indivisible and includes all the steps taken by the Inspector to ascertain the truth of the complaint alleging that the appellant was attempting to obtain a bribe.
Laying a trap, is a part of the investigation and a permission given under section 5A of the Prevention of Corruption Act enables the officer concerned not only to lay a trap but also to further investigate.
The fact that the Inspector of Police obtain the two permissions, one for laying a trap and 564 another for investigating the case, does not affect the earlier order as the second permission was wholly superfluous.
[566 G H, 567 B D] (2) The order giving permission to.
the Inspector did not give any reasons and there is thus a violation of section 5A.
But an illegality committed in the course of an investigation does not vitiate the result of a trial unless there was a miscarriage of justice.
In the present case the legality of the investigation was not challenged in the trial court and prejudice to the appellant was neither pleaded nor established.
[568 C D, F G].
(3) The presumption under section 4 arises when it is shown that the accused had received the stated amount and that the said amount was not legal remuneration.
[569 D].
(4) The words 'unless the contrary is proved ' in section 4(1) show that the presumption was to be rebutted by proof and not by a bare explanation which is merely plausible.
The 'burden testing on the accused will however be satisfied if he establishes his case by a mere preponderance of probability and it is not necessary for him to prove it beyond reasonable doubt.
In the present case, the appellant 's plea was not accepted by the trial court and the High Court and hence, it must be held that he had not discharged the burden placed on him.
[571 C E].
State of M.P. vs Mubarak Ali, , H. N. Rishbud and Inder Singh vs State of Delhi, [1955] 1 S.C.R. 1150, State of U.P. vs Bhagwant Kishore Joshi, A.I.R. , Munnalal vs State of U.P. ; , C. 1.
Emden vs State of U.P. ; , Dhanvantrai Balwantrai Desai vs State of Maharashtra, A.I.R. and V. D. Jhangan vs, State of U.P. ; , followed.
(5) Under section 6(1) (c) of the Prevention of Corruption Act, the appellant could not be prosecuted without the previous sanction of the authority competent to remove him.
Oral evidence of the officer giving sanction cannot be relied on for deciding the validity of the sanction.
The Court must be satisfied by reference to the rules on the subject.
Schedule 11 to the 1961 Rules relating to discipline and appeal of railway servants makes provision for the punishment of railway servants employed in zonal railways.
Under the Schedule I a head of a department was not competent to impose on Class III officers the punishment of removal from service.
That punishment could only be imposed by an appointing authority or any other higher authority.
Under r, 134.
the authorities competent to make first appointments to non gazetted posts are the General Manager.
the Chief Administrative Officer or a lower authority to whom he may delegate power; but the power has not been delegated to heads of departments.
Therefore, the Chief Medical Officer was neither the appointing authority nor was he competent to.
remove the appellant from his Office.
Hence he was also not competent to grant the sanction for prosecuting the appellant.
D; 573B C, H;574A B].
R. R. Chari vs State of U.P. [1963].1 S.C.R. 121, followed. |
Appeals Nos. 484 and 485 of 1965.
Appeals by special leave from the judgment and decree dated December 14, 1959 of the Madras High Court in Appeals Nos. 808 and 746 of 1954.
S.T. Desai, P. C. Bhartari, and J., B. Dadachanji, for the appellants (in both the appeals).
A.V. Rangam, for respondents Nos.
I to 3 (in C.A. No. 484 of 1965).
R. Gopalakrishnan, for respondents Nos.
I to 3 (In C.A. No.485 of1965).
B. Dutta, for respondents Nos. 4, 9 and II (in C.A. No. 484 of 1965) and respondents Nos.
13 to 17 and 20 (in C.A. No. 485 of 1965).
544 The Judgment of the Court was delivered by Bachawat, J.
In the village of Thenkarai in the Madurai District there is an ancient temple of Sri Thirumoolanathaswami.
Inams were granted by Hindu kings for performance of services ,of watchman, palanquin bearer, background music player, dancing girl, musical instrument player, mason, blacksmith carpenter, potter, washerman connected with the temple.
The inams were confirmed by the British Government.
For over 80 years, the inams were in the enjoyment of alienees from inamdars.
By an order passed on April 10, 1947 under section 44 B of the Madras Hindu Religious Endowments Act, the Revenue Divisional Officer, Usilampatti resumed the inam lands and regranted them to the temple.
On October 17, 1947, this order was confirmed on appeal by the District Collector.
The Revenue Divisional Officer and the District Collector held that the inams comprised both melwaram and kudiwaram rights in the land.
The orders were passed ,on notice to the alienees.
The alienees instituted a suit in the ,Court of the Subordinate Judge, Madurai under the proviso to section 44 B(2)(d)(ii) asking for a decree declaring that the inam grants consisted of the melwaram only.
The suit was withdrawn to the Court of the District Judge, Madurai and registered as O.S. No. 3 of 1954.
They, instituted another suit in the Court of the Sub ordinate Judge, Madurai, asking for a decree declaring that the ,order of the Collector dated October 17, 1947 was a nullity.
This suit was transferred to the Court of the District Judge and registered as O.S. No. 4 of 1954.
The District Judge dismissed O.S. No. 3 of 1954.
He decreed O.S. No. 4 of 1954 and declared that the order resuming the inam lands was illegal and a nullity.
The plaintiffs filed an appeal registered as A.S. No. 746 of 1954 in the High Court of Madras from the decree in O.S. No. 3 of 1954.
The High Court dismissed the appeal.
The State of Madras filed an appeal registered as A.S. No. 808 of 1954 from the decree in O.S. No. 4 of 1954.
The High Court allowed the appeal and dismissed the suit with respect to all the inams except the Dasi inam.
Regarding the Dasi inam, the High Court dismissed the appeal as the inam was enfranchised and could not be resumed.
It is from the decree of the High Court dismissing the suits in respect of the other inams that the plaintiffs have filed these appeals after obtaining special leave.
The two courts concurrently held that the inams comprised both the kudiwaram and the melwaram.
The District Judge held that the right to resume an inam could not be extinguished by adverse possession, and that, in any event, the claim of adverse possession was not established.
The High Court held that assuming the right of resumption could be so extinguished, it was not established that the plaintiffs and their predecessors in title were in pOS session of the inam lands adversely to the inamdars or the Gov 545 ernment.
The District Judge held that the inams were personal inams burdened with services and the order of resumption was therefore illegal and a nullity.
The High Court reversed this finding and held that the inams were for performance of services connected with the temple and were resumable under section 44 B. The District Judge held that section 44 B was retrospective in operation.
On this last point, the High Court did not express any opinion.
It may be noted that O.S. Nos. 3 and 4 of 1954 were tried along with O.S. Nos.
I and 2 of 1954 and disposed of by the District Judge by a common judgment.
O.S. Nos. 1 and 2 of 1954 related to inams granted for performance of puja in another temple.
From the decrees passed in O.S. Nos. 1 and 2 of 1954, there were appeals to the High Court and subsequently appeals to this Court.
The judgment in those appeals is reported in Roman Catholic Mission vs State of Madras(1).
One of the points in all the four suits was whether section 44 B was ultra vires the powers of the legislature.
This Court held that the Provincial Legislature was competent to enact section 44 B and the amendment to it.
On behalf of the appellants, Mr.S. T. Desai submitted that (1) the inam grants did not comprise the kudiwaram; (2) the inams were personal inams burdened with services and were not resumable under section 44 B; (3) Section 44 B (2) was not retrospective in operation and did not authorise resumption of the inams on the ground of any alienation thereof made before 1934; (4) there was no alienation of the inams as contemplated by section 44 B (2) (a) (i) and (5) the right of resumption of the inam lands was extinguished by adverse possession of the lands by the alienees for over 60 years.
The Madras Hindu Religious Endowments Act, 1926 (Madras Act II of 1927) was passed on January 19, 1927.
Section 44 B was inserted in the present Act by Madras Act XI of 1934 and was later amended by Madras Act V of 1944 and Madras Act, of 1946.
This section corresponds to section 35 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 1951) which repealed Act II of 1927.
The material provisions of section 44 B are in these terms : "44 B. (1) Any exchange, gift, sale or mortgage, and any lease for a term exceeding five years, of the whole or any portion of any inam granted for the support or maintenance of a math or temple or for the performance of a charity or service connected therewith and made, confirmed or recognised by the British Government, shall be null and void.
Explanation.
Nothing contained in this sub section shall affect or derogate from the rights and obligations (1) ; 546 of the landholder and tenant in respect of any land as de fined in the Madras Estates Land Act, 1908.
(2)(a) The Collector, may on his own motion, or on the application of the trustee of the math or temple or of the Assistant Commissioner or of the Board or of any person having interest in the math or temple who has obtained the consent of such trustee, Assistant Commissioner or Board, by order, resume the whole or any part of any such inam, on one or more of the following grounds, namely : (i) that the holder of such inam or part has made an exchange, gift, sale or mortgage of the same or any portion thereof or has granted a lease of the same or any portion thereof for term exceeding five years, or (ii) that the holder of such inam or part has failed to perform or make the necessary arrangements for performing, in accordance with the custom or usage of such math or temple, the charity or service for performing which the inam had been made, confirmed or recognised by the British Government, or any part of the said charity or service, as the case may be, or (iii) that the math or temple has ceased to exist or the charity or service in question has in any way become impossible of performance.
When passing an order under this clause, the Collector shall determine whether such inam or the inam comprising such part, as the case may be, is a grant of both the melwaram and the kudiwaram or only of the melwaram.
(f)Where any main or part of an inam is resumed under this section, the Collector or the District Collector, as the case 'may be, shall, by order, regrant such inam or part (i)as on endowment to the math or temple concerned,or (ii)in case of resumption on the ground that the math or temple has ceased to exist or that the charity or service in question has in any way become impossible of performance, as an endowment to the Board, for appropriation to such religious, educational or charitable .,purposes not inconsistent with the objects of such math or temple, as the Board may direct.
" 547 The inam title deeds, the entries in the inam fair register prepared at the time of the confirmation of the inams by the Inams Commissioner in 1863 and the contemporaneous statement made by the inamdars are of the same pattern in respect of all the inams.
It is sufficient to refer to Exs.
B 4, B 5 and B 6 relating to the inam for the service of Sree Padarn Thangi (palanquin bearers).
The statement, exhibit B 4, shows that in fasli 1272 corresponding to 1862 63, Veerabadra Mudali, Periasami Mudali, Andiappa Mudali were in enjoyment of the inam and rendering the service under the direction of the Paisaldars or the trustees of the temple.
They made the following statement: "For taking the deities in procession round the village during the festival in the temple of Tirumulanathaswami and Akilandeswari Amman in the village of Kovil Thenkarai the aforesaid land has been granted as inam.
The paisaldars appointed our ancestors and got service from them.
The aforesaid manyam was in their enjoyment.
Afterwards the manyam was divided and during fasli 36, it was registered in the name of myself individual No. 1 and in the names of the fathers of individuals Nos. 2 and 3.
They were rendering the service and enjoying manyam and in the same manner.
We have been rendering the aforesaid service and enjoying the manyam.
" The entries in the inam fair register, exhibit B 5 show that the inam belonged to the category of Devadayam and was for the service, of Sree Padam Thangi which was being then rendered, that the original grant was made to the temple before fasli 1212 corresponding to 18023, and that in 1863 the inam was being enjoyed by Verrabadra Mudali, Periasami Mudali and Andiappa Mudali.
The title deed acknowledged their title to Devadayan or pagoda service inam to 11.47 acres of land held for the service of Sree Padam Thangi and confirmed the inam to them and their successors tax free to be held without interference so long as the conditions of the grant were duly fulfilled.
Those documents show that the lands were being enjoyed by the inamdars and were granted as inams.
The amount of the assessment or melwaram was very low and could not be an ade quate remuneration.
for the services to be rendered.
The plaintiffs claimed title to the lands under a grant from the inamdars on the footing that the inamdars were entitled to the kudiwaram and the melwaram.
The conclusion is irresistible that the inam comprised both the warams.
The inams were originally granted, to the temple for the performance of services connected therewith.
The trustees of the temple appointed persons to perform those services and placed the inams in their possession to be enjoyed by them as remuneration for the services to be rendered by them.
The Inam Commission confirmed the grants of the inams in favour of the hereditary officeholders then rendering the services.
Where there were several 548 holders of the office, the inams were shown to be in their enjoyment in equal shares.
It is quite clear that the inams were granted .to the holders of hereditary offices as remuneration for services to be rendered by them in connection with the temple.
There is a well recognised distinction between the grant of the land burdened with a condition of service and the grant of land as remuneration for an office, see, Forbes vs Noor Mahomed Tuquee(1).
Section 44 B does not apply to a personal inam burdened with a condition of service, See P. V. Bheemsena Rao vs Siyrigiri Pedda Yella Reddi(2).
It applies to an inam granted to an ,office holder as remuneration for his services connected with a math or temple as also to an inam granted to the institution direc tly.
The inams in the present case were not personal inams.
They were inams granted to office holders as remuneration for services to be rendered by them and were within the purview of 44 B.
The next question is whether section 44 B allows resumption of an inam falling within the purview of the section where the inam was alienated before the section came into force in 1934.
Subsection (1) of section 44 B renders null and void certain alienations of the inam.
Sub section (2) authorises resumption of the inam on certain grounds.
Sub section (2) is not dependent upon sub sec.
(1) and allows resumption even in cases where there has been no alienation of the inam.
In the present case, we are not concerned with the retrospective operation of sub see.
(1) of section 44 B, and we express no opinion on it.
But there can be no doubt that section 44 B (2)(a)(i) allows a resumption of the inam where there has ,been an alienation of the inam either before or after 1934.
Even apart from section 44 B, any inam whatever its nature could be resumed for failure to perform the conditions of the grant.
Subject to certain restrictions and safeguards, paragraph 2 of the Board 's Standing Order No. 54 permitted resumption of religious and charitable inams on the ground that the land was alienated or otherwise lost to the institution or service to which it once belonged or on the ground that the terms of the grant were not observed.
The object ,of section 44 B was to define and enlarge the, grounds on which the inams could be resumed and to devise a proper procedure for the resumption.
On general grounds of public policy, the legislature has declared that the inam may be resumed on any of the three grounds mentioned therein.
The first ground is that the holder of the inam has made an alienation.
The words "has made" in sub. section (2)(a)(i) takes in all alienations past and future and not only future alienations or alienations made after the section came into force. ' If there has been any alienation at any time the first ground ,exists and the inam may be resumed under section 44 B.
The words "has failed" in sub.
section
(2)(a)(ii) and the words "has ceased" and (1) (1870) 13 H.I.A.438,464.
(2) ; 549 "has become" in sub.
section
(2)(a)(iii) similarly authorise resumption of the inam if the other grounds exist though they may have arisen earlier.
Section 44 B(2) is in its direct operation prospective as it authorises only future resumption after it came into force.
It is not properly called retrospective "because a part of the requisites for its action is drawn from a time antecedent to its passing," See Maxwell on Interpretation of Statutes, 1 1 the, p. 21 1.
The, inams in the present case are resumable under section 44 B(2)(a)(i) though the alienations were made before 1934.
Section 44 B(2)(a)(i) is attracted if the holder of the inam has made an exchange, gift, sale or mortgage of the inam or has granted a lease of it for a term exceeding five years.
In the plaint in Suit O.S. No. 4 of 1954 the plaintiffs claimed that one Kunjanna Ayyar, their predecessor in title purchased the lands from the inamdars before 1861.
The plaintiffs failed to prove that the inamdars sold the lands.
The only direct evidence as to how Kunjanna Ayyar came into possession of the suit lands is furnished by exhibit A 2, a statement made by the inam holders to the Madurai District Collector on August 14, 1868.
It shows that Kunjanna Ayyar had taken the lands on cowle from the inamdars.
The word "cowle" means a lease.
In Wilson 's Glossary it is stated that the word ordinarily denotes a lease and not a mortgage.
Before the District Collector the plaintiffs admitted that they were holding under a cowle lease.
The District Collector held that the alienation was within the purview of section 44 B. The High Court also held that the plaintiffs and their predecessor in title were in enjoyment of the lands under the lease.
At no stage of the litigation either before the revenue authorities or in the plaint or before the District Judge or in the High Court did the plaintiffs contend that the alienation in their favour was not within the purview of section 44 B (2) (a) (i).
As a matter of fact, the case made in the plaint was that their predecessor in title had purchased the land from the inamdars.
Such an alienation is clearly within the purview of section 44 B(2)(a)(i).
For the first time in this Court it is contended that the alienation was by way of a lease from year to year.
It may be conceded that all lease& do not come within the purview of section 44 B(2)(a)(i).
The km must be for a term exceed ' 5 years.
A lease from year to year is not a lease for a term exceeding 5 years howsoever long the lessee might have continued in possession of the demised lands.
But we think that the plaintiffs ought not to be allowed to raise at this late stage the novel contention that the lease was from year to year '.
This contention is contrary to the case made by them in the plaint.
Moreover, the materials on the record do not support the contention.
The plaintiffs and their predecessor in title were in continuous possession of the lands for over 80 years under the cowle lease.
The original cowle is not forthcoming.
The plaintiffs claimed to be permanent alienees of the lands.
In all these circumstances, we are inclined to presume that the cowle granted 550 a permanent lease and the inams were resumable under section 44 B (2)(a)(i).
There is no period of limitation prescribed for the initiation of proceedings under section 44 B(2).
The section gave a new statutory right of resumption of the inams.
On a resumption of the inams, the title, if any, of all persons claiming through the inamdars to any subordinate interest in the inams stood determined.
Kunjanna Ayyar and his successors in title were lessees of the inam lands under the inamdars.
During the continuance of the tenancy, their possession was not adverse to the inamdars.
A fortiori, their possession *as not adverse to the Government under whom the inamdars held the inam lands.
They did not acquire any prescriptive title to the kudiwaram rights either against the inamdars or against the Government.
The Government could, therefore, resume the inam lands made under section 44 B(2) and dispossess the inamdars and the plaintiffs claiming as lessees under them.
The question whether an alienee from the inamdar can acquire prescriptive title to the kudiwaram rights in the inam lands against the Government and thereby defeat the latter 's right to resume the inam does not, therefore, arise for decision, and we express no opinion on it.
It, may be noted that in Roman Catholic Mission vs State of Madras( ') this Court held that there is no limitation barring imposition of assessment on the land after resuming the melwaram.
It follows that both the kudiwaram and melwaram rights were rightly resumed under section 44 B(2)(4)(i).
In the result, the appeals are dismissed.
In all the circumstances of the case, there will be no order as to costs.
G.C. Appeals dismissed.
(1) [1966] 3 S.C.R.283,299. | Inams were granted by Hindu kings for performance of certain servicer, (e.g. watchmen, music players etc.) in the ancient temple, of Thirumoolanathaswami.
The inams were confirmed by the British Government.
For over 80 years the inams were enjoyed by alienees from the inamdars.
By an order passed on April 10, 1947 under section 44 B of the Madras Hindu Religious Endowments Act, 1926, the Revenue Divisional Officer resumed the inam lands and regranted them to the temple.
His order was confirmed on appeal by the District Collector.
Both these authorities held that the inams comprised both melwaram and kudiwaram rights.
The alienees instituted a suit in the Court of the Subordinate Judge under the proviso to section 44 B (2) (d) (ii) asking for a decree declaring that the inam grants consisted of the melwaram only.
They filed another suit asking for a declaration that the aforesaid order passed by the Collector was a nullity.
In appeals against the order of the trial judge the High Court decided against the plaintiffs except as regards Dasi inams.
Against the High court 's order the plaintiff appellants came to this Court.
It was contended on their behalf that : (i) the inam grants did not comprise the Kudiwaram; (ii) the inams were personal inams burdened with services and were not resumable under s.(iii) Section 44 B(2) was not retrospective in operation and did not authorise resumption of the inams on the ground of any alienation thereof made before 1934 when it came (iv)there was no alienation of the inams as contemplated by section 44 B (2) (a) (i); and (v) the tight of resumption of the inam lands was extinguished by adverse possession of the lands by the alienees for 60 years.
HELD: (i) The documents in evidence showed that the lands were being enjoyed by the inamdars and were granted as inams.
The amount of the assesment or melwaram was very low and could not be an adequate remuneration for the services to be rendered.
The plaintiffs claimed title to the lands under a grant from the inamdars on the footing that the inamdars were entitled to the kudiwaram and the melwaram.
The conclusion is irresistible that the inam comprised both the warams.[547 F G] (ii) There is a well recognised distinction between the grant of the land burdened with a condition of service and the grant of land as remuneration for an office.
Section 44 B does not apply to a personal inam burdened with a condition of service.
It applies to an inam granted to an office holder as remuneration for his services connected with a math or temple as also to an inam granted to the institution directly.
The inams in the present cases were not personal inams.
They were inams granted 543 to office holders as remuneration for services to be rendered by them and were within the purview of section 44 B. [548 B C].
(iii) The words 'has made ' in section 44 B(2)(a)(i) take in all alienations past and future and not only future alienations or alienation made after the section came into force.
Section 44 B(2) is in its direct operation prospective as it authorises only future resumption after it came into force.
It is not properly called retrospective "because a part of the requisites for its action is drawn, from , a time antecedent to its passing.
" The inams in the present case were resumable under section 44B(2)(a)(i) though the alienations were made before 1934.
[548 G 549B].
Maxwell on interpretation on Statutes 11th Ed., p. 211, relied on.
(iv) The appellants admitted that they held the land from the inamdars under a cowle lease and at no earlier stage did the appellants contend that the lease was not within the purview of section 44 B(2)(a)(i).
The plea that the lease was from year to year and hence outside the purview of the section could not be allowed to be raised for the first time in this Court.
[849 E H].
(v) The appellants being lessees their possession was not adverse to the inamdars.
A fortiori, their possession was not adverse to the Government under whom the inamdars held the inam lands.
They did not acquire any prescriptive title to the kudiwaram rights either against the inamdars or against the Government.
The Government could therefore resume the inam lands under section 44 B(2) and dispossess the inamdars and the plaintiffs claiming as lessees under then.
[550 B C].
[The question whether an alienee from the inamdar can acquire a prescriptive title to the kudiwaram rights in the inam lands and thereby defeat the latter 's right to resume the inam did not on the above view arise for decision and the court therefore expressed no opinion on it.] Roman Catholic Mission vs State of Madras, [1966] 3 S.C.R. 283, referred to.
Forbes vs Noor Mahomed Tuquee, [1870] 13 M.I.A. 438, 464 and P V. Dheenuena Rao vs Sirigiri Pedda Yella Reddi, ; , relied on. |
iminal Appeal No.232 of 1967.
Appeal by special leave from the judgment and order dated August 30, 1967 of the Assam and Nagaland High, Court in Criminal Appeal No. 115 of 1964.
K. Rajendra Chaudhuri, for the appellants, Naunit Lal, for the respondent, 611 The Judgment of the Court was delivered by Bhargava, J.
The appellants, Iman Ali and Jogesh Chandra Arjya, were convicted by the Court of Session for an, offence punishable under section 396 of the Indian Penal Code and sentenced to imprisonment for life.
The facts found by the Court of Session for convicting the appellants were that, on the night between 11th and 12th May, 1962, between 1 and 2 a.m., the appellants, along with about 12 or 13 others, committed dacoity in the house of I Tenu Arjya.
At the time of committing the dacoity the dacoits broke open the door of the house with the cross bar of a plough.
Four dacoits, including the two appellants, entered the house, while the remaining persons remained standing outside.
As soon, as the door was broken, Golapi, the wife of Tenu Arjya.
was shot at with a gun by Iman Ali appellant, and then the other appellant Jogesh Chandra Arjya shot Tenu Arjya.
Both Golapi and her husband Tenu Arjya fell down dead.
Thereafter, the dacoits demanded money from Hari Charan Arjya, the son of the two deceased persons.
They took away a sum of Rs. 2,500/ which was kept in a quilt and also removed the gold ear rings, one silver necklace and one waist band from the person of Golapi.
The commission of this offence in the manner described above was held ' by the Sessions Court to be proved on the basis of the evidence given by the prosecution, and, thereupon, finding both the appellants guilty of the offence punishable under section 396, I.P.C., that court sentenced each of these appellants to imprisonment for life.
Iman Ali appellant filed an appeal in the High Court of Assam and Nagaland.
The learned Judges of the High Court, on perusing the judgment, were of the prima facie opinion that, if the conviction of Iman Ali was to be upheld, there was no justification for not awarding to him the sentence of death and, consequently, they issued notice to Iman Ali to show cause why the sentence should not be enhanced.
At the same time, a notice was also issued to, the other appellant Jogesh Chandra Arjya by the learned Judges suo motu to show cause why his sentence should also not be enhanced to sentence of death.
Thereafter, the appeal of Iman Ali was heard and both the appellants were heard in respect of the show cause notices issued to them, Opportunity was, in addition, offered to Jogesh Chandra Arjya to urge whatever could be said on his behalf against his conviction also.
The High Court affirmed the findings of fact of the Court of Session and enhanced the sentence of both these appellants, so that the sentence of rigorous imprisonment for life ",as altered to sentence of death, with the direction that they be hanged by the neck till they are dead.
Both the appellants Sought leave, from the High Court to appeal to this Court, but leave was refused.
Thereupon, both of them sought special leave under Article 136 of the Constitution.
By in order dated 8th December, 1967, this Court ranted special leave limit 612 ed to the question whether, in this case, the enhancement of the sentence from life imprisonment to sentence of death was justified.
Consequently, in this appeal, the only point that falls for determination is whether the order of the High Court enhancing the sentence of the appellants from life imprisonment to death was justified and should be upheld.
Learned counsel for the appellants, in challenging the justification for the order of enhancement of sentence by the High Court, relied on the principle laid down by this Court in Dalip Singh and Others vs State of Punjab (1), which was explained in the following words "In a case of murder, the death sentence should ordinarily be imposed unless the trying Judge for reasons which should normally be recorded considers it proper to award the lesser penalty.
But the discretion is his and if he gives reasons on which a judicial mind could properly be found, an appellate court should not interfere.
The power to enhance a sentence from transportation to death should very rarely be exercised and only for the strongest possible reasons.
It is not enough for an appellate court to say, or think, that if left to itself it would have awarded the greater penalty because the discretion does not belong to the appellate court but to the trial Judge and the only ground on which an appellate court can interfere is that the discretion has been improperly exercised, as for example, where no reasons are given and none can be inferred from the circumstances of the case, or where the facts are so gross that no normal judicial mind would have awarded the lesser penalty.
" It appears to us, however, that, in the present case, this principle is of no assistance to the appellants for challenging the step taken by the High Court.
This Court cautioned the appellate court against interfering if the discretion of the trying Judge is exercised for reasons recorded by him and if it appears from the reasons that he had exercised a judicial mind in not awarding the sentence of death.
In the present case, as mentioned by the High Court and as is apparent from the judgment of the Court of Session, the trial court awarded the sentence of imprisonment for life without giving any reasons at all for adopting that course.
It is true that the appellants were not convicted in the present case for the offence of murder simpliciter under section 302, I.P.C.; but that, in our opinion, is immaterial.
The conviction of the appellants under s ' 396, I.P.C., was not based on constructive liability as members of the gang of dacoits.
There was clear finding by the (1) ; at p. 156. 613 Court of Session which has been upheld by the High Court that each of these appellants committed a cold blooded murder by shooting two inmates of the house simply with the object of facilitating commission of dacoity by them.
Those persons were shot and killed even though they had not even tried to put up any resistance.
The offence under section 396, I.P.C., was therefore, no less heinous than an offence under section 302, I.P.C.
In these circumstances, when the Court of Session gave no reason at all for not awarding the sentence of death and for sentencing them to imprisonment for life only, it cannot be held that the High Court was not justified in interfering with that order.
Learned counsel in this connection referred us to a decision of a Division Bench of the Allahabad High Court in Lal Singh vs Emperor(1), where it was held : "We do not consider that as a general rule a sentence of death should necessarily follow a conviction under section 396, I.P.C., and this Section differs from section 302, I.P.C., in that respect.
The rule is under section 302, that a sentence of death should follow unless reasons are shown for giving a lesser sentence.
No such rule applies to section 396, I.P.C." Again, we do not think that the learned Judges of the Allahabad High Court intended to lay down that, even in cases where a person is convicted for the offence under section 396, I.P.C., and there is clear evidence that he himself had committed a cold blooded murder in committing the dacoity, a sentence of death should not follow.
Clearly, the view expressed was meant to apply to those cases where there could be no definite finding as to which person committed the murder and all the members of the gang are held constructively guilty of the offence punishable under section 396, I.P.C. A principle enunciated for such a situation cannot be applied to a case where there is direct evidence that a particular accused committed the murder himself, as is the finding in the present case.
In these circumstances, the order made by the High Court must be held to be justified and the appeal is dismissed.
G.C. Appeal dismissed.
(1) A.I.R. 1938 Alld. | The appellants were convicted by the court of sessions for an offence punishable under section 396 of the Indian Penal Code and sentenced to imprisonment for life.
They were held to have shot dead two inmates of a house in which along with others they had gone to commit dacoity.
One of the appellants filed an appeal in the High Court against his conviction.
The High Court thereafter gave notice to both the appellants to show cause why the sentence of imprisonment passed against each of them should not be enhanced to death.
After hearing them the High Court sentenced them both to death.
The order was challenged in this Court and it was urged that the High Court should not have interfered with the discretion of the Sessions Judge in the matter of passing the appropriate sentence and that the considerations which apply to I sentence under section 302 I.P.C. would not apply to a case under section 396 I.P.C. HELD : (i) The offence committed by the appellants was heinous and committed in cold blood with the sole object of committing dacoity.
It was not a case of constructive liability but the appellants had themselves committed the murders and therefore no advantage could be taken of the fact that the conviction was under section 396 and not under section 302.
On the above facts the enhancement of sentence by the High Court from life imprisonment to death was justified especially when the trial court had not given any reasons for awarding the lesser sentence.
In Dalip Singh 's case this Court only cautioned the appellate court against interfering if the discretion of the trying judge is exercised for reasons recorded by him and if it appears from the reasons that he had exercised a judicial mind in not awarding the sentence of death.
[612 F 613B].
Dalip Singh & Ors.
vs State of Punjab ; , 156, explained.
Lal Singh vs Emperor, A.I.R. 1938 Alld.
625, distinguished. |
ivil Appeal No. 14 of 1953.
Appeal by special leave granted by the Supreme Court, by its Order dated the 29th October, 1951, from the Judgment and Decree dated the 19th July, 1950, of the High Court of Judicature at Patna (Sinha and Rai JJ.) in appeal from Appellate Decree No. 1152 of 1946 from the Judgment and Decree dated the 24th day of May, 1946, of the Court of the 1st Additional District Judge in section J. Title Appeal No. I of 1946 arising out of the Judgment and Decree dated the 27th November, 1945, of the First Court of Subordinate Judge at Monghyr in Title Suit No. 34 of 1944.
S.C. Issacs (Ganeshwar Prasad and R. C. Prasad, with him) for the appellants.
B.K. Saran and M. M. Sinha for respondents Nos.
1 9. 1954.
April 14.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This appeal raises a question on the construction of section 11 of the Suits Valuation Act.
The appellants instituted the suit out of which this appeal arises, in the Court of the Subordinate Judge, Monghyr, for recovery of possession of 12 acres 51 cents of land situated in mauza Bardih, of which defendants Nos. 12 and 13, forming the second party, are the proprietors.
The allegations in the plaint are that on 12th April, 1943, the plaintiffs were admitted by the second party as occupancy tenants on payment of a sum of Rs. 1,950 as salami and put into possession of the. lands, and that thereafter, the first party consisting of defendants Nos. 1 to 11 trespassed on them and carried away the crops.
The, suit was 119 accordingly laid for ejecting defendants Nos.
I to II and for mesne profits, past and future, and it was valued at Rs. 2,950, made up of Rs. 1,950 being the value of the relief for possession and Rs. 1,000, being the past mesne profits claimed.
Defendants Nos.
I to II contested the suit.
They pleaded that they had been in possession of the lands as tenants on batai system, sharing the produce with the landlord., from fasli 1336 and had acquired occupancy rights in the tenements, that the second party had no right to settle them on the plaintiffs, and that the latter acquired ' no rights under the settlement dated 12th April, 1943.
Defendants Nos. 12 and 13 remained ex parte.
The Subordinate Judge held, relying on certain receipts marked as Exhibits A to A 114 which were in the handwriting of the patwaris of the second party and which ranged over the period from fasli 1336 to 1347, that defendants Nos.
I to II had been in possession for over 12 years as cultivating tenants and had acquired occupancy rights, and that the settlement dated 12th April, ' 1943, conferred no rights on the plaintiffs.
He accordingly dismissed the suit.
The plaintiffs preferred an appeal against this decision to the Court of the District Judge.
Monghyr, who agreed with the trial Court that the receipts, Exhibits A to A 114 were genuine, and that defendants Nos.
I to 11 had acquired occupancy rights, and accordingly dismissed the appeal.
The plaintiffs took up the matter in second appeal to the High Court, Patna, S.A. No. 1152 of 1946, and there, for the first time; an objection was taken by the Stamp Reporter to the valuation in the plaint and after enquiry, the Court determined that the correct valuation of the suit was Rs. 9,980.
The plaintiffs paid the additional Court fees required of them, and then raised the contention that on the revised valuation, the appeal from the decree of the Subordinater Judge would lie not to the District Court but to the High Court, and that accordingly section A. No. 1152 of 1946 should be heard as a first appeal, ignoring the judgment of the District Court.
The learned Judges held following the decision 120 of a Full Bench of that Court in Ramdeo Singh vs Raj Narain (1), that the appeal to the District Court was competent, and that its decision could be reversed only if the appellants could establish prejudice on the merits, and holding that on a consideration of the evidence no such prejudice had been shown, they dismissed the second appeal.
The matter now comes before us on special leave.
It will be noticed that the proper Court to try the present action would be the Subordinate Court, Monghyr, whether the valuation of the suit was Rs. 2,950 as given in the plaint, or Rs. 9,880 as determined by the High Court; but it will make a difference in the forum to which the appeal from its judgment would lie, whether the one valuation or the other is to be accepted as the deciding factor.
On the plaint valuation, the appeal would lie to the District Court; on the valuation as determined by the High Court, it is that Court that would be competent to entertain the appeal.
The contention of the appellants is that as on the valuation of the suit as ultimately determined, the District Court was not competent to entertain the appeal, the decree and judgment passed by that Court must be treated as a nullity, that the High Court should have accordingly heard S.A. No. 1152 of 1946 not as a second appeal with its limitations under section 100 of the Civil Procedure Code but as a first appeal against the judgment and decree of the Subordinate Judge, Monghyr, and that the appellants were entitled to a full heating as well on questions of fact as of law.
And alternatively, it is contended that even if the decree and judgment of the District Court on appeal are not to be treated as a nullity and the matter is to be dealt with under section 11 of the Suits Valuation Act, the appellants had suffered "Prejudice" within the meaning of that section, in that their appeal against the judgment of the Subordinate Judge was heard not by the High Court but by a Court of inferior jurisdiction, viz., the District Court of Monghyr, and that its decree was therefore liable to be set aside, and the appeal heard by the High Court on the merits, as a first appeal.
(1) I.L.R. 27 Patna 109; A.I.R. 1949 Patna 278, 121 The answer to these contentions must depend on what the position in law is when a Court entertains a suit or an appeal over which it has no jurisdiction, and what the effect of section II of the Suits Valuation Act is on that position.
It is a fundamental principle well established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings.
A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the action, strikes at the very authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties.
If the question now under consideration fell to be ' determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was coram non judice, and that its judgment and decree would be nullities.
The question is what is the effect of section 11 of the Suits Valuation Act on this position.
Section 11 enacts that notwithstanding anything in section 578 of the Code of Civil Procedure, an objection that a Court which had 'no jurisdiction over a suit or appeal had exercised it by reason of over valuation or under valuation, should not be entertained by an appellate Court., except as provided in the section.
Then follow provisions as to when the objections could be entertained, and how they are to be dealt with.
The drafting of the section has come in and deservedlyfor considerable criticism; but amidst much that is obscure and confused, there is one principle which stands out clear and conspicuous.
It is that a decree passed by a Court, which would have had no jurisdiction to hear a suit or appeal but for over valuation or under valuation, is not to be treated as, what it would be but for the section, null and void, and that an objection to jurisdiction based on over valuation or undervaluation should be dealt with under that section and not otherwise.
The reference to section 578, now section 99, of the Civil Procedure Code, in the opening words of the section is significant.
That section, while providing that no decree shall be reversed or varied in 16 122 appeal on account of the defects mentioned therein when they do not affect the merits of the case, excepts from its operation defects of jurisdiction.
Section 99 therefore gives no protection to decrees passed on merits, when the Courts which passed them lacked jurisdiction as a result of over valuation or undervaluation.
It is with a view to avoid this result that section 11 was enacted.
It provides that objections to the jurisdiction of a Court based on over valuation or under valuation shall Dot be entertained by an appellate Court except in the manner and to the extent mentioned in the section.
It is a self contained provision complete in itself, and no objection to jurisdiction based on over valuation or under valuation can be raised otherwise than in accordance with it.
With reference to objections relating to territorial jurisdiction, section 21 of the Civil Procedure Code enacts that no objection to the place of suing should be allowed by an appellate or revisional Court, unless there was a consequent failure of justice.
It is the same principle that has been adopted in section 1 1 of the Suits Valuation Act with reference to pecuniary jurisdiction.
The policy underlying sections 21 and 99 of the Civil Procedure Code and section 11 of the Suits Valuation Act is the same, namely, that when a case had been tried by a Court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice, and the policy of the Legislature has been to treat objections to jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate Court, unless there has been a prejudice on the merits, The contention of the appellants, therefore, that the decree and judgment of the District Court, Monghyr, should be treated as a nullity cannot be sustained under section 11 of the Suits Valuation Act.
On behalf of the appellants Rajlakshmi Dasee V. Katyayani Dasee(1) and Shidappa Venkatrao vs Rachappa Subrao(2) which was affirmed by the Privy Council in Rachappa Subrao Jadhav vs Shidappa Venkatrao Jadhav(3) were relied on as supporting the contention (1) I.L.R. (2) I.L.R. 36 Bom, 628.
(3) 46 I.A. 24.
123 that if the appellate Court would have had no jurisdiction to entertain the appeal if the suit had been correctly valued, a decree passed by it must be treated as a nullity.
In Rajlakshmi Dasee vs Katyayani Dasee(1), the facts were that one Katyayani Dasee instituted a suit to recover the estate of her husband Jogendra in the Court of the Subordinate Judge, Alipore, valuing the claim at Rs. 2,100, whereas the estate was worth more than a lakh of rupees.
The suit was decreed, and the defendants preferred an appeal to the District Court, which was the proper Court to entertain the appeal on the plaint valuation.
There, the parties compromised the matter, and a consent decree was passed, recognising the title of the defendants to portions of the estate.
Then, Rajlakshmi Dasee, the daughter of Jogendra, filed a suit for a declaration that the consent decree to which her mother was a party was not binding on the reversioners.
One of the grounds urged by her was that the suit of Katyayani was deliberately under valued, that if it had been correctly valued, it was the High Court that would have had the ,competence to entertain the appeal, and that the con,sent decree passed by the District Judge was accordingly a nullity.
In agreeing with this contention, the High Court observed that a decree passed by a Court which had no jurisdiction was a nullity, and that even consent of the partes could not cure the defect.
In that case, the question was raised by a person who was not a party to the action and in a collateral proceeding, and the Court observed: " We are not now called upon to consider what the effect of such lack of, jurisdiction would be upon the decree, in so far as the parties thereto were concerned.
It is manifest that so fir as a stranger to the decree is concerned, who is interested in the property affected by the decree, he can obviously ask for a declaration that the decree is a nullity, because made by a Court which had no jurisdiction over the subject matter of the litigation" On the facts, the question of the effect of section 11 of the Suits Valuation Act did not arise for determination, and was not considered.
(1) I.L.R. 124 In Shidappa Venkatrao vs Rachappa Subrao(1) the plaintiffs instituted a suit in the Court of the Subordinate Judge, First Class, for a declaration that he was the adopted son of one Venkatrao and for an injunction restraining the defendant from interfering with his possession of a house.
The plaint valued the declaration at Rs. 130 and the injunction at Rs. 5, and the suit was valued for purposes of pleader 's fee at Rs. 69,016 9 0 being the value of the estate.
The suit was decreed by the Subordinate Judge, and against his decree the defendant preferred an appeal to the District Court, which allowed the appeal and dismissed the suit.
The plaintiff took up the matter in second appeal to the High Court, and contended that on the valuation in the plaint the appeal against the decree of the Subordinate Judge lay to the High Court, and that the appeal to the District Court was incompetent.
This contention was upheld, and the decree of the District Judge was set aside.
It will be seen that the point in dispute was whether on the allegations in the plaint the value for purposes of jurisdiction was Rs. 135 or Rs. 69,016 9 0, and the decision was that it was the latter.
No question of over valuation or under valuation arose, ' and no decision on the scope of section 11 of the Suits Valuation Act was given.
As a result of its decision, the High Court came to entertain the matter as a first appeal and affirmed the decree of the Subordinate Judge.
The defendant then took up the matter in appeal to the Privy Council in Rachappa Subrao Jadhav vs Shidappa Venkatrao Jadhav(2), and there, his contention was that, in fact, on its true valuation the suit was triable by the Court of the Subordinate Judge of the Second Class, and that the District Court was the proper Court to entertain the appeal.
The Privy Council held that this objection which was " the most technical of technicalities " was not taken in the Court of first instance, and that the Court would not be justified " in assisting an objection of that type," and that it was also untenable.
Before concluding, it observed: " The Court Fees Act was passed not to arm a litigant with a weapon of technicality against his (1) I.L.R. 36 Bom.
(2) 46 I.A. 24.
125 opponent but to secure revenue for the benefit of the State. .The defendant in this suit seeks to utilise the provisions of the Act not to safeguard the interests of the State,but to obstruct, the plaintiff ; he does not contend that the Court wrongly decided to ' the detriment of the revenue but that it dealt with the case without jurisdiction.
In the circumstances this plea, advanced for the first time at the hearing of the appeal in the District Court, is misconceived, and was rightly rejected by the High Court.
" Far from supporting the contention of the appellants that the decree passed in appeal by the District Court of Monghyr should be regarded as a nullity, these observations show that an objection of the kind now put forward being highly technical in character should not be entertained if not raised in the Court of first instance.
We are therefore of opinion that the decree and judgment of the District Court, Monghyr, cannot be regarded as a nullity.
It is next contended that even treating the matter as governed by section 11 of the Suits Valuation Act, there was prejudice to the appellants, in that by reason of the under valuation, their appeal was heard by a Court of inferior jurisdiction, while they were entitled to a bearing by the High Court on the facts.
It was argued that the right of appeal was a valuable one, and that deprivation of the right of the appellants to appeal to the High Court on facts must therefore be held, without more, to constitute prejudice.
This argument proceeds on a misconception.
The right of appeal is no doubt a substantive right, and its deprivation is a serious prejudice; but the appellants have not been deprived of the right of appeal against the judgment of the Subordinate Court.
The law does provide an appeal against that judgment to the District Court, and the plaintiffs have exercised that right.
Indeed, the undervaluation has enlarged the appellants ' right of appeal, because while they would have had only a right of one appeal and that to the High Court if the suit had been correctly valued, by reason of the under valuation they obtained right to two appeals, one to the District Court and another to the High Court.
The complaint of the 126 appellants really is not that they had been deprived of a right of appeal against the judgment of the Subordinate Court, which they have not been, but that an appeal on the facts against that judgment was heard by the District Court and not by the High ,Court.
This objection therefore amounts to this that a change in the forum of appeal is by itself a matter of prejudice for the purpose of section 1 1 of the Suits Valuation Act.
The question, therefore, is, can a decree passed on appeal by a Court which had jurisdiction to entertain it only by reason of under valuation be set aside on the ground that on a true valuation that Court was not competent to entertain the appeal? Three High Courts have considered the matter in Full Benches, and have come to the conclusion that mere change of forum is not a prejudice within the meaning of section 11 of the Suits Valuation Act.
Vide Kelu Achan vs Cheriya Parvathi Nethiar (1), Mool Chand vs Ram Kishan (2) and Ramdeo Singh y. Baj Narain (3).
In our judgment, the opinion expressed in these decisions is correct.
Indeed, it is impossible on the language of the section to come to a different conclusion.
If the fact of an appeal being heard by a Subordinate Court or District Court where the appeal would have lain to the High Court if the correct valuation had been given is itself a matter of prejudice, then the decree passed by the Subordinate Court or the District Court must, without more, be liable to be set aside, and the words "unless the overvaluation or under valuation thereof has prejudicially affected the disposal of the suit or appeal on its merits" would become wholly useless.
These words clearly show that the decrees passed in such cases are liable to be interfered with in an appellate Court, not in all cases and as a matter of course, but only if prejudice such as is mentioned in the section results.
And the prejudice envisaged by that section therefore must be something other than the appeal being heard in a different forum.
A contrary conclusion will lead to the surprising result that the section was enacted with the object of curing (1) I.L.R. 46 Mad.
(2) I.L.R. 55 All.
(3) I.L.R. 27 Patna 109; A.I.R. 1949 Patna 278.
127 defects of jurisdiction arising by reason of over valuation, or under valuation but that, in fact, this object has not been achieved.
We are therefore clearly of opinion that the prejudice contemplated by the section is something different from the fact of the appeal having been heard in a forum which would not have been competent to hear it on a correct valuation of the suit as ultimately determined.
It is next argued that in the view that the decree of the lower appellate Court is liable to be reversed only on proof of prejudice on the merits, the second appellate Court must, for the purpose of ascertaining whether there was prejudice, hear the appeal fully on the facts, and that, in effect, it should be Heard as a first appeal.
Reliance is placed in support of this contention on the observations of two of the learned Judges in Ramdeo Singh vs Rai Narain (1).
There, Sinha J. observed that though the second appeal could not be treated as a first appeal, prejudice could be established by going into the merits of the decision both on questions of fact and of law,, and that that could be done under section 103 of the Civil Procedure Code.
Meredith J. agreed that for determining whether there was prejudice or not, there must be an enquiry on the merits of the decisions on questions of fact but he was of opinion that that could be done under section I I of the Suits Valuation Act itself.
Das J., however, declined to express any opinion on this point, as it did not arise at that stage.
The complaint of the appellants is that the learned Judges who heard the second appeal, though they purported to follow the decision in Ramdeo Singh vs A. Narain (1) did not, in fact, do so, and that there was no consideration of the evidence bearing on the questions of fact on which the parties were in dispute.
That brings us to the question as to what is meant by prejudice" in section II of the Suits Valuation Act.
Does it include errors in findings on questions of fact in issue between the parties ? If it does, then it will be obligatory on the Court hearing the second appeal to examine the evidence in full and decide whether the (1) I.L.R. 27 Patna tog; A.I. R, 1949 Patna 278.
128 conclusions reached by the lower appellate Court are right.
If it agrees with those findings, then it will affirm the judgment; if it does not, it will reverse it.
That means that the Court of second appeal is virtually in the position of a Court of first appeal.
The language of section 11 of the Suits Valuation Act is plainly against such a view.
It provides that overvaluation or under valuation must have prejudicially affected the disposal of the case on the merits.
The prejudice on the merits must be directly attributable to over valuation or under valuation and an error in a finding of fact reached on a consideration of the evidence cannot possibly be said to have been caused by over valution or under valuation.
Mere errors in the conclusions on the points for determination would therefore be clearly precluded by the language of the section.
It must further be noted that there is no provision in the Civil Procedure Code, which authorises a Court of second appeal to go into questions of fact on which the lower appellate Court has recorded findings and to reverse them.
Section 103 was relied on in Ramdeo Singh vs Raj Narain (1) as conferring such a power.
But that section applies only when the lower appellate Court has failed to record a finding on any issue, or when there had been irregularities or defects such as fall under section 100 of the Civil Procedure Code.
If these conditions exist, the judgment under appeal is liable to be set aside in the exercise of the normal powers of a Court of second appeal without resort to section 11 of the Suits Valuation Act.
If they do not exist, there is no other power under the Civil Procedure Code authorising the Court of second appeal to set aside findings of fact and to re hear the appeal itself on those questions.
We must accordingly hold that an appellate Court has no power under section 1 1 of the Suits Valuation Act to consider whether 'the findings of fact recorded by the lower appellate Court are correct, and that error in those findings cannot be held to be prejudice within the meaning of that section.
So far, the definition of "prejudice" has been negative in terms that it cannot be mere change of forum (1) I.L.R. 27 Patna 109.
129 Dr mere error in the decision on the merits.
What then is Positively prejudice for the purpose of section 11 ? That is a question which has agitated Courts in India ever.
since the enactment of the section.
It has been suggested that if there was no proper hearing of the suit or appeal and that had resulted in injustice, that would be prejudice within section 11 of the Suits Valuation Act.
Another instance of prejudice is when a suit which ought to have been filed as an original suit is filed as a result of under valuation on the small cause side.
The procedure for trial of suits in the Small Cause Court is summary; there are no provisions for discovery or inspection; evidence is not recorded in extenso, and there is no right of appeal against its deci sion.
The defendant thus loses the benefit of an elaborate procedure and a right of appeal which he would have had, if the suit had been filed on the original side.
It can be said in such a case that the disposal of the suit by the Court of Small Causes has prejudicially affected the merits of the case.
No purpose, however, is.
served by attempting to enumerate exhaustively all possible cases of prejudice which might come under section II of the Suits Valuation Act.
The jurisdiction that is conferred on appellate Courts under that section is an equitable one, to be exercised when there has been an erroneous assumption of jurisdiction by a Subordinate Court as a result of over valuation or under valuation and a consequential failure of justice.
It is neither possible nor even desirable to define such a risdiction.
closely, or confine it within stated bounds.
Pt can only be predicated of it that it is in the nature of a revisional jurisdiction to be exercised with caution and for the ends of justice, whenever the facts and ,situations call for it.
Whether there has been prejudice or not is, accordingly, a matter to be determined on the facts of each case.
We have now to see whether the appellants have suffered any prejudice by reason of the under valuation.
They were.
the plaintiffs in the action.
They valued the suit at Rs. 2,950.
The defendants raised no objection to the jurisdiction of the Court at any time.
When the plaintiffs lost the suit after an elaborate 17 130 trial, it is they who appealed to the District Court as they were bound to, on their valuation.
Even there, the defendants took no objection to the jurisdiction of the District Court to hear the appeal.
When the deci sion went on the merits against the plaintiffs, they preferred section A. No. 1152 of 1946 to the High Court of Patna, and if the Stamp Reporter had not raised the objection to the valuation and to the Court fee paid, the plaintiffs would not have challenged the jurisdiction of the District Court to hear the appeal.
It would be an unfortunate state of the law, if the plaintiffs who initiated proceedings in a Court of their own choice could subsequently turn round and question its jurisdiction on the ground of an error in valuation which was their own.
If the law were that the decree of a Court which would have had no jurisdiction over the suit or appeal but for the over valuation or undervaluation should be treated as a nullity, then of course, they would not be estopped from setting up want of jurisdiction in the Court by the fact of their having themselves invoked it.
That, however, is not the position under section 1 1 of the Suits Valuation Act.
Why then should the plaintiffs be allowed to resile from the position taken up by them to.
the prejudice of their opponents, who had acquiesced therein ? There is considerable authority in the Indian Courts that clausts (a) and (b) of section I 1 of the Suits Valuation Act should be read conjunctively, notwithstanding the use of the word "or." If that is the correct interpretation, the plaintiffs would be precluded from raising the objection about jurisdiction in an appellate Court.
But even if the two provisions are to be construed disjunctively, and the parties held entitled under section 1 1 (1) (b) to raise the objection for the first time in the appellate Court, even then, the recuirement as to prejudice has to be satisfied, and the party who has resorted to a forum of his own choice on his own valuation cannot himself be heard to complain of any prejudice.
Prejudice can be a ground for relief only when it is due to the action of another party and not when it results from one 's own act.
Courts cannot recognise that as prejudice which flows from the action of the 131 very party who complains about it.
Even apart from this, we are satisfied that no prejudice was caused to the appellants by their appeal having been heard by the District Court.
There was a fair and full hearing of the appeal by that Court; ' it gave its decision on the merits on a consideration of the entire evidence in the case, and no injustice is shown to have resulted in its disposal of the matter.
The decision of the learned Judges that there were no grounds for interference under section 11 of the Suits Valuation Act is correct.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed. | The policy underlying section 11 of the Suits Valuation Act,as also of sections 21 and 99 of the Code of Civil Procedure, is that when a case has been tried by a Court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless a failure of justice has resulted.
The policy of the Legislature has been to treat objections as to jurisdiction, both territorial and pecuniary, as technical and not open to consideration by an appellate Court, unless there has been prejudice on the merits.
Mere change of form is not prejudice within the meaning of section 11 of the Suits Valuation Act; nor a mere error in the decision on the merits of the case.
It must be one directly attributable to over valuation or under valuation.
Whether there has been prejudice or not is a matter to be determined on the facts of each case.
The jurisdiction under section 11 is an equitable one to be exercised, when there has been an erroneous assumption of jurisdiction by a Subordinate Court as a result of over valuation or under valuation and a consequential failure of justice.
It is neither possible, nor desirable to define such jurisdiction closely or confine it within stated bounds.
118 A party who has resorted to a forum of his own choice on his own valuation cannot himself be heard to complain of any prejudice.
Ramdeo Singh vs Baj Narain (I.L.R. 27 Patna 109); Bajlakshmi Dasee vs Katyayani Dasee (I.L.R. ; Shidappa Venkatrao vs Rachappa Subrao (I L.R. 36 Bom.
628) ; Rachappa Subrao Jadhav vs Shidappa Venkatrao Jadhav (46 I.A. 24) ; Kelu Achan vs Cheriya Parvathi Nethiar (I.L.R. 46 Mad.
631) Mool Chand vs Bam Kishan (I.L.R. 55 All. 315) referred to. |
Civil Appeal No. 173 of 1983.
PG NO 336 From the Judgment and Order dated 30.9.1982 of the Calcutta High Court in Suit No. 568 of 1979.
Ajay Nath Ray, Surendra Dube and Mrs. Indira Sawhney for the Appellant.
S.K. Kapur, Ranjan Deb, Gangadeb and B.P. Singh for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
A somewhat important question as to the nature and scope of the rights available to a defendant whose "defence has been struck out" calls for determination in this appeal in the particular context of the West Bengal Premises Tenancy Act, 1956.
The appeal arises from the judgment of a Full Bench of the Calcutta High Court constituted to resolve a conflict in the earlier decisions of the same court on this issue.
The Full Bench, by a majority of two (P.K. Banerjee and Chittatosh Mookerjee, JJ) to one (Ramendra Mohan Datta, Acting C.J.) decided that in a matter where the defence against delivery of possession has been struck out under sub section 3 of section 17 of the West Bengal Premises Tenancy Act, 1956, (hereinafter referred to as the 'Act ') the defendant tenant cannot cross examine the witnesses called by the plaintiff, excepting on the point of notice under section 13(6) of the said Act.
The correctness of the view taken by the majority is contested in this appeal.
Though the learned Judges were of opinion that the issue decided on the reference raised substantial questions of law of general importance, they considered themselves unable to grant a certificate of fitness for appeal to this Court since the reference had arisen only on an interim order and the view expressed did not result in a judgment, order or decree against which leave to appeal could be granted.
Thereupon the aggrieved party filed a petition for special leave to appeal before this Court, which was granted.
It is in this manner that the issue has been brought up before this Court.
A detailed factual background is not necessary since the question raised is purely one of law.
It may, however, be mentioned that the respondent in this appeal filed a suit in 1979 on the original side of the Calcutta High Court praying for a decree directing the defendant (present appellant) to deliver up vacant and peaceful possession of certain premises in Calcutta and also for a decree for mesne profits or damages from February 1, 1978 till the date of PG NO 337 delivery of possession.
The appellant, a company carrying on business at the premises in question, filed its written statement denying the averments in the plaint and the claims made therein.
During the pendency of the suit several interlocutory applications were made from time to time in which orders were passed directing the present appellant (hereinafter referred to as the tenant) to deposit certain sums in court.
At one stage it appears that the tenant made an application praying that he may be permitted to deposit the arrears of rent in monthly instalments along with the current rents.
No orders were passed on this application on the ground that the application was out of time.
However, it appears that subsequent to disposal of this application, the defence of the tenant had been struck off under the provisions of section 17(3) of the Act.
The correctness of this order striking out the defence of the tenant has become final and is no longer in issue.
It, however, appears that the tenant contended before the trial court (though the details are not available on record) that the order under section 17(3) could, at worst, preclude the tenant only from adducing evidence, oral or documentary, in support of the averments made in its written statement.
It was claimed that it was open to the tenant to exercise his rights (a) of cross examining the plaintiff 's witnesses; (b) of pointing out to the court the factual and legal infirmities in the plaintiff 's case; and (c) of addressing arguments on the basis of evidence as adduced by the plaintiff and tested by the cross examination on behalf of the defendant.
Learned counsel for the appellant also urged before us that though the defendant had conceded before the High Court that it will not be entitled to lead any evidence, the reference being of a general question regarding the consequences of a strike off, we should consider the question in all its aspects and lay down the principles governing such cases.
We may start by referring to the provisions of section 17 of the Act.
When a suit for eviction is filed under the Act agianst any tenant on any of the grounds specified in Section 13 of the Act, Section 17(1) imposes an obligation on the tenant to deposit into the Court or with the controller or pay to the landlord all arrears of rent due from him with interest within a specified period and also to PG NO 338 continue to deposit or pay the current rent thereafter regularly month after month.
Sub section (2) provides a machinery for the determination of the amounts to be so paid or deposited, in case of dispute.
Sub section (2A) and (2B) contain provisions enabling the Court, subject to certain restrictions, to extend the time for such deposit or payment or allow the deposit or payment to be made in instalments.
If the tenant deposits or pays the amounts as above, he is protected from being evicted from the premises on the ground of non payment of rent: sub section (4).
If, on the other hand, he fails to deposit any amount referred to above within the time permitted, the consequence set out in sub section (3) will follow.
That sub section reads: "(3) If a tenant fails to deposit, or pay any amount referred to in sub section (1) or sub section (2) within the time specified therein or within such extended time as may be allowed under clause (a) of sub section (2A), or fails to deposit or pay any instalment permitted under clause (b) of sub section (2A) within the time fixed therefor, the Court shall order the defence against delivery of possession to be struck out and shall proceed with the hearing of the suit." (underlining ours) Before discussing the interpretation of the crucial words of the sub section, it may be useful to set out certain analogous provisions which have been the subject of judicial consideration: (a) The West Bengal Act XVII of 1950, which preceded the one under consideration, was somewhat different in its language.
section 14(1) of that Act dealt with a case where the suit was based on the ground of non payment of rent.
The Court could make an order calling upon the tenant to pay up the arrears of rent on or before a specified date.
The sequitir was set out in sub sections (3) and (4) as follows: "(3) If within the time fixed in the order under sub section (1), the tenant deposits in the court the sum specified in the said order, the suit, so far as it is a suit for recovery of possession of the premises, shall be dismissed by the court.
In default of such payment the court shall proceed with the hearing of the suit: Provided that the tenant shall not be entitled to the benefit of protection against eviction under this section if PG NO 339 he makes default in payment of the rent referred to in clause (i) of the proviso to sub section 1 of section 12 on three occasions within a period of eighteen months." "(4) If the tenant contests the suit, as regards claim for ejectment, the plaintiff landlord may make an application at any stage of the suit for order on the tenant defendant to deposit month by month rent at a rate at which it was last paid and also the arrears of rent, if any, and the court after giving an opportunity to the parties to be heard may make an order for deposit of rent at such rate month by month and the arrears of rent, if any, and on failure of the tenant to deposit the arrears of rent within fifteen days of the date of the order or the rent at such rate for any month by the fifteenth day of the next following month, the court shall order the defence against ejectment to be struck out and the tenant to be placed in the same position as if he had not defended the claim to ejectment.
The landlord may also apply for permission to withdraw the deposited rent without prejudice to his right to claim decree for ejectment and the court may permit him to do so." (b) Our attention has been drawn to two provisions of the Rules framed by the Calcutta High Court governing proceedings on its Original Side.
These rules read as follows: Chapter IX Rule 4: Suit heard ex parte against defendants in default Where one or more of several defendants has or have filed a written statement or written statements, but another or others has or have not, the suit shall, unless otherwise ordered, upon production of a certificate showing such default, be heard ex parte as against the defaulting defendant or defendants.
Chapter XIV Rule 3: Where heard ex parte defendant may, in person, cross examine and address the Court Where a suit is heard ex parte against any defendant, such defendant may be allowed to cross examine, in person, the plaintiff 's witnesses, and to address the Court; but unless the Court otherwise specially orders, evidence will not be received on his behalf, nor will he be allowed the assistance of an Advocate or Attorney.
PG NO 340 (c) Another provision that may be referred to in this context is the one in Order 11 rule 21 of the Code of Civil Procedure (C.P.C.) This rule reads thus: 21(1) Non compliance with order for discovery Where any party fails to comply with any order to answer interrogatories, or for discovery or inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect, and an order may be made on such application accordingly, after notice to the parties after giving them a reasonable opportunity of being heard.
(2) Where an order is made under sub rule (1) dismissing any suit, the plaintiff, shall be precluded from bringing a fresh suit on the same cause of action.
On behalf of the appellant learned counsel submits that a tenant or defendant whose "defence is struck out" is in the same position as if he had filed no written statement in the suit.
It is pointed out that the Original Side Rules of the Calcutta High Court permit a defendant who is said to be ex parte, either by not filing a written statement or by non appearance, to cross examine the plaintiff 's witnesses and to address the court; not only that, the rules confer a discretion in the court to permit him to have the assistance of an advocate and even to adduce evidence on his behalf.
This is based on the principle that the effect of an order striking out the defence can only be that the defendant should not, because of his default, be permitted to plead the positive case, which he had or could have put forward in his written statement or substantiate it by leading evidence on his side.
This cannot preclude him from putting forward the plea that the plaintiff is not entitled to a decree as he has not proved his case.
This, it is said, he is entitled to do either by cross examining the plaintiff 's witnesses and thus demolishing the plaintiff 's case or addressing arguments either on points of law or even on the facts in the light of the plaintiff 's evidence as tested by his cross examination.
Even this cannot, it is urged, be an invariable rule and the Court should always have a discretion, as provided for in the Calcutta High Court Rules, to relax its rigidity depending upon the circumstances of each case.
The position in an eviction Petition, it is said, cannot be much different.
Learned counsel urges that is a well established principle, PG NO 341 particularly under the Rent Acts, that it is for the plaintiff to satisfy the court that the conditions set out in the statute to enable him to obtain an order of eviction are strictly fulfilled.
Even where a defendant is said to be ex parte, the plaintiff is not absolved from this responsibility and it is also necessary for the Court, in such cases, to satisfy itself that the plaintiff is entitled, on the terms of the statute, to the relief prayed for: vide K.K. Chari vs R.M. Seshadri, AIR ; and Inder Mohan Lal vs Ramesh Khanna, ; In doing this the Court can and should take the help and assistance of the defendant and counsel.
It should be open to the defendant/tenant, even if he cannot put up a positive case, to show to the Court that the plaintiff 's suit or petition should fail on its own inherent weaknesses.
Learned counsel has relied on certain decisions and the observations therein in support of his submissions.
These may be referred to: An early decision of this Court, Sangram Singh vs Election Tribunal, Kotah, Bhurey Lal Baya, ; , was concerned with the question whether a defendant who had been set ex parte at some of the hearings (after the first hearing) could be permitted to appear and take part in later hearings, without the ex parte order being set aside.
The Court, after referring the terms of the Order XVII Rule 2 of the Code of Civil Procedure, observed thus: "The learned Judges who constituted a Full Bench of the Lucknow Chief Court (Tulsha Devi vs Sri Krishna, thought that if the original ex parte order did not ensure throughout all future hearings it would be necessary to make a fresh ex parte order at each succeeding hearing.
But this proceeds on the mistaken assumption that an ex parte order is required.
The order sheet, or minutes of the proceedings, has to show which of the parties were present and if a party is absent the Court records that fact and then records whether it will proceed ex parte against him, that is to say, proceed in his absence, or whether it will adjourn the hearing; and it must necessarily record this fact at every subsequent hearing because it has to record the presence and absence of the parties at each hearing.
With all due deference to the learned Judges who hold this view, we do not think this is a grave or a sound objection.
A much weightier consideration is that the plaintiff may be gravely prejudiced in a given case because, as the PG NO 342 learned Rajasthan Judges point out, and as O 'Sullivan, J. thought, when a case proceeds ex parte the plaintiff does not adduce as much evidence as he would have if it had been contested.
He contents himself with leading just enough to establish a prima facie case.
Therefore, if he is suddenly confronted with a contest after he has closed his case and the defendant then comes forward with an army of witnesses he would be taken by surprise and gravely prejudiced.
That objection is, however, easily met by the wide discretion that is vested in the Court.
If it has reason to believe that the defendant has by his conduct misled the plaintiff into doing what these learned Judges apprehend, then it might be a sound exercise of discretion to shut out cross examination and the adduction of evidence on the defendant 's part and to allow him only to argue at the stage when arguments are heard.
On the other hand, cases may occur when the plaintiff is not, and ought not to be, misled.
If these considerations are to weigh, then surely the sounder rule is to leave the Court with an unfettered discretion so that it can take every circumstances into consideration and do what seems best suited to meet the ends of justice in the case before it." M/s. Paradise Industrial Corpn.
vs M/s. Kiln Plastics Products, ; was a case which arose under the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.
The trial Judge passed an order directing the tenant to deposit certain amounts in court, in default, making the notice absolute and directing that the defence would be struck off and the suit fixed for ex parte hearing.
An ex parte decree followed.
A single Judge of the Bombay High Court set aside the ex parte decree on the ground that the above order was illegal and without jurisdiction as it did not conform to the provisions contained in section 11(4) of the Act in question which only provided that, in case the directions of the court are not complied with, the defendant "shall not be entitled to appear in or defend the suit except with leave of the Court, which leave may be granted subject to such terms and conditions as the Court may specify.
"It did not, in the view of the learned Judges, authorise the Court to strike off the defence straightaway.
Reversing this order of the leared Judge, this Court observed: "We are afraid the learned Judge of the High Court has missed the substance and chased the shadow.
The words "striking out the defence" are very commonly used by PG NO 343 lawyers.
Indeed the application made on February 24, 1969 by the plaintiffs was for a direction to order the defences of the defendants to be struck off in default of payment of the amount ordered by the Court.
The phrase "defence struck off ' or "defence struck out" is not unknown in the sphere of law.
Indeed it finds a place in Order XI Rule 21 of the Code of Civil Procedure . .
In effect; both mean the same thing.
Nobody could have misunderstood what was meant.
Indeed, one may even say that the phrase "the defence to be struck off" or "struck out" is more advantageous from the point of view of the defendants.
Even when a defence is struck off the defendant is entitled to appear, cross examine the plaintiff 's witnesses and submit that even on the basis of the evidence on behalf of the plaintiff a decree cannot be passed against him, whereas if it is ordered in accordance with Section 11(4) that he shall not be entitled to appear in or defend the suit except with the leave of the court he is placed at a greater disadvantage.
The use of the words 'defence struck off ' does not in any way affect the substance of the order and the learned Judge of the High Court was wholly in error in holding that because of the form of the order passed on June 2, 1969 the order was illegal and without jurisdiction.
The order squarely falls within Section 11(4).
What the law contemplates is not adoption or use of a formula; it looks at the substance.
The order is not therefore one without jurisdiction.
It is one which the Judge was competent to make.
Somewhat similar in nature are the observations made in M/s. Babbar Sewing Machine Company vs Trilok Nath Mahajan, ; while dealing with the provisions of Order XI Rule 21 of the C.P.C.
The court was of opinion that, for the nature of the default in the said case it was a travesty of justice that the trial court should have passed an order striking out the defence of the defendant and the High Court should have declined to set it aside.
In this context, after discussing the scope of Order XI Rule 21 as to the manner in which the discretion of the court should he exercised, the Court made certain general observations towards the end of the judgment of the following effect: "It was further contended that the High Court was in error in observing that 'in view of the clear language of PG NO 344 Order XI, Rule 21 ' the defendant has no right to cross examine the plaintiff 's witnesses.
A perusal of Order XI, Rule 21 shows that where a defence is to be struck off in the circumstances mentioned therein, the order would be that the defendant "be placed in the same position as if he has not defended".
This indicates that once the defence is struck off under Order XI, Rule 21, the position would be as if the defendant had not defended and accordingly the suit would proceed ex parte.
In Sangram Singh vs Election Tribunal, ; , it was held that if the court proceeds ex parte against the defendant under Order IX, Rule 6(a), the defendant is still entitled to cross examine the witnesses examined by the plaintiff.
If the plaintiff makes out a prima facie case the court may pass a decree for the plaintiff.
If the plaintiff fails to make out a prima facie case, the court may dismiss the plaintiff 's suit.
Every Judge in dealing with an ex parte case has to take care that the plaintiff 's case is, at least, prima facie proved.
But, as we set aside the order under Order XI Rule 21, this contention does not survive for our consideration.
We, therefore, refrain from expressing any opinion on the question.
" Our attention has also been invited to the incidental references by this Court to the aspect presently in issue before us while considering the questions, in the context of analogous provisions of the rent statutes, whether the Court has a discretion to extend the time for the deposits to be made by the tenant when there is no specific statutory provision to that effect and whether, where the tenant fails to make the deposit as directed, the Court is bound to strike out his defence or has a discretion to take or not to take this extreme step.
In Ram Chand vs Delhi Cloth & General Mills Co. Ltd., ; , this Court, on the language of the Delhi Rent Control Act agreeing with the High court ILR 1972 2 Delhi 503 on this point held that the Rent Controller has no power to condone the tenant 's default by extending the time for payment.
This Court, however, did not agree with the High Court 's view that the default of the tenant vested an indefeasible right in the landlord and entitled him to an order of eviction straightaway.
The Court observed: "While we agree with the view of the High Court that the controller has no power to condone the failure of the tenant to pay arrears of rent as required under section 15(1), we PG NO 345 are satisfied that the Full Bench fell into an error in holding that the right to obtain an order for recovery of possession accrued to the landlord.
As we have set out earlier, in the event of the tenant filing to comply with the order under section 15(1), the application will have to be heard giving an opportunity to the tenant if his defence is not struck out under section 15(7) and without hearing the tenant if his defence is struck out." (emphasis added) Shyamcharan Sharma vs Dharamdass, ; was a case under the Madhya Pradesh Accommodation Control Act.
The tenant had not been able to deposit the rents as per the directions of Court and sought an extension of time.
The landlord opposed the application for condonation of delay on the ground that the Court had no power to grant it.
This contention was rejected by the first court and first appellate court but the High Court accepted the plea and decreed the suit for eviction.
The Supreme Court allowed the tenant 's appeal.
It observed: "It is true that in order to entitle a tenant to claim the protection of section 12(3), the tenant has to make a payment or deposit as required by section 13, that is to say, the arrears of rent should be paid or deposited within one month of the service of the writ of summons on the tenant or within such further time as may be allowed by the court, and should further deposit or pay every month by the 15th, a sum equivalent to the rent.
It does not, however, follow that failure to pay or deposit a sum equivalent to the rent by the 15th of every month, subsequent to the filing 'of the suit for eviction, will entitle the landlord straightaway, to a decree for eviction.
The consequences of the deposit or payment and non payment or non deposit are prescribed by subss.
(5) and (6) of section 13.
Since there is a statutory provision expressly prescribing the consequence of non deposit or non payment of the rent, we must look to and be guided by that provision only to determine what shall follow.
section 13(6) does not clothe the landlord with an automatic right to a decree for eviction, nor does it visit the tenant with the penalty of a decree for eviction being straightaway passed against him.
section 13(6) vests, in the court, the discretion to order the striking out of the defence against eviction.
In other words, the Court, having regard to all the cir cumstances of the case, may or may not PG NO 346 strike out the defence.
If section 13 were to be construed as mandatory and not as vesting a discretion in the Court, it might result in the situation that a tenant who has deposited the arrears of rent within the time stipulated by section 13(1) but who fails to deposit thereafter the monthly rent on a single occasion for a cause beyond his control may have his defence struck out and be liable to summary eviction.
We think that section 13 quite clearly confers a discretion, on the court, to strike out not to strike out the defence, if default is made in deposit or payment of rent as required by section 13(1).
If the Court has the discretion not to strike out the defence of a tenant committing default in payment or deposit as required by section 13(1), the court surely has the further discretion to condone the default and extend the time for payment or deposit.
Such a discretion is a necessary implication of the discretion not to strike out the defence.
" The apparent conflict between these cases camp up for consideration in Ram Murti vs Bhola Nath, After considering the two earlier decisions, the Court observed: "It would be incongruous to hold that even if the defence of the tenant is not to be struck out under Section 15(7), the tenant must still be visited with the punishment of being deprived of the protection under Section 14(2).
In Hem Chand 's case the Court went to the extent of laying down that even if the defence of the tenant is struck out under Section l5(7), the Rent Controller could not straightaway make an order for eviction in favour of the landlord under Section 14(1)(a).
The Court held that the High Court was wrong in its assumption that failure to comply with the requirements of section 15(1) vests in the landlord an 'indefeasible right ' to secure an order for the eviction of the tenant under Section 14(1)(a).
The Court set aside the judgment of the High Court taking that view and remanded the matters to the Rent Controller observing that there was still an issue to be tried.
If that be so, the question at once arises, "what is the issue to be tried?" If the landlord has still to make out a case before the Rent Controller that he was entitled to an order for eviction of the tenant under section 14(1)(a), surely the tenant has the right to participate in the proceedings and cross examine the landlord.
It must logically follow as a necessary PG NO 347 corollary that if the defence is not to be struck out under Section 15(7) it means that the tenant has still the defences open to him under the Act.
In the premises, the conclusion is irresistible that he has the right to claim protection under Section 14(2).
What is of essence of Section 14(2) and of Section 15(6) is whether there has been a substantial compliance with the order passed under Section 15(1).
The words "as required by section 15(1)" in these provisions must be construed in a reasonable manner.
If the Rent Controller has the discretion under Section 15(7) not to strike out the defence of the tenant, he necessarily has the power to extend the time for payment of future rent under Section 15(1) where the failure of the tenant to make such payment or deposit was due to circumstances beyond his control.
The previous decision in Hem Chand 's case interpreting Section 15(7) and Section 14(2) in the context of Section 15(7) of the Delhi Rent Control Act, 1958, although not expressly overruled, cannot stand with the subsequent decision in Shyamcharan case interpreting the analogous provisions of the Madhya Pradesh Accommodation Control Act, 1961 as it is of a larger Bench." ( Underlining ours) One more decision of this Court to which counsel for the respondents referred may also be touched upon here, viz. Bela Das and others vs Samarendra Nath Bose, [1975] 2 S.C.R. 1004.
In that case, the respondent was a tenant of a certain premises in respect of which a suit for eviction had been filed.
The tenant was directed to pay into court the arrears and future rent but he did not comply with the order and his defence was struck out.
Thereafter, an ex parte decree of eviction was passed and confirmed by the first appellate court.
In second appeal, the High Court remitted the case to the trial court on the ground that, since the respondent had not admitted the appellants to be full owners of the premises but contended that other co sharers of the appellant 's family had also shares therein, there was a denial of the relationship of landlord and tenant and that the order striking out the respondent 's defence qua tenant did not prevent him from contesting the suit on the question of title.
The appeal against the High Court 's order was allowed by this Court.
The Court observed: "The defendant had admitted that he was the tenant under the plaintiffs but was merely asserting that there were some more landlords of the premises in question.
It was PG NO 348 not a case of denial of relationship of landlord and tenant between the parties.
In the case of Mahabir Ram, AIR 1968 Patna 415, the tenant had denied the title of the plaintiffs and set up a title in himself.
In the instant case the plea of the defendant has been that the plaintiffs being landlords of the suit premises for a moiety of share could not alone claim a decree for eviction against him.
Such a plea set up by the defendant to resist the suit for eviction was a plea qua tenant and not de hors it.
The striking out of the defence on 8.7.1964 had the effect of striking out all defence raised by the defendant qua tenant including his defence that the plaintiffs alone being co sharer landlords were not entitled to maintain the suit for eviction.
It may also be added that the learned Munsif in his order dated 8.7.1964 striking out the defence, which order was confirmed by a Bench of the High Court in Civil Revision No. 824 of 1964 decided on 21.4.1964, had pointed out on the basis of the defendant 's statements in his written statement as also in his rejoinder to the plaintiff 's petition under section 11A of the Act that the defendant had admitted that he was paying rent to the plaintiffs and had recognised them to be their landlords.
In that view of the matter also the plaintiffs were the landlords of the suit premises occupied by the defendant within the meaning of clause (d) of section 2 of the Act.
In either view of the matter there is no escape for the defendant in this case that his entire defence in the suit was in his capacity as a tenant and on its striking out it was struck out as a whole.
The hearing of the suit ex parte was, therefore, legal and valid.
The contrary view taken by the High Court is erroneous in law.
" A brief reference may now be made to the conflict of decisions in the Calcutta High Court which occasioned the reference to the Full Bench.
The first two cases were under the original side rules and concerned the consequences of a defendant failing to enter appearance in a suit.
In a very early decision in S.N. Banerjee vs H.S. Suhrawardy, AIR 1928 Cal.
772 Rankin, C.J. had observed, of the rights of a defendant who had not entered appearance, as follows: "If he does not enter appearance within the time limited the case will go into what is called the undefended list and when the case is on the undefended list it is not possible for the defendant without obtaining leave to enter PG NO 349 appearance.
He has a limited right to cross examine witnesses adduced on behalf of the plaintiff if he appears at the time when the undefended case is down for hearing, out his position is that of a man who for not entering appearance in time is precluded from defending the suit whether he appears at the hearing or does not appear at the hearing.
" Referring to these observations in Dabendra Nath Dutt vs Smt.
Satyabala Dassi and others, AIR 1950 Cal. 217, P.B. Mukharji, J. said: "Thus then there are two consequences of not entering appearance under the Rules.
One is that the suit is liable to be heard ex parte and the other is that no written statement can be filed.
In that context, I am not inclined to impose more punishment than those two so explicitly stated by the Rules.
Therefore I am of the opinion that a party subject to these handicaps imposed by the Rules can still appear, under the Civil Procedure Code when the suit is called on for hearing from the undefended list, not only to cross examine the witnesses of the plaintiff and demolish in such manner the plaintiffs case on evidence that the Court will not pass any decree in the plaintiff 's favour but also to make such arguments and submissions on law and on such evidence as the plaintiff may have brought to the Court.
These are, in my opinion, valuable rights under the Code which are not taken away by any Rules of the original side.
If that be so I fail to see why in such a case the terms of 0.9 Rr. 8 and 9 of the Code cannot be made applicable to the original side of this Court notwithstanding the technicalities of "entering appearance" as introduced by the Rules of the original side practice.
It may be that when because of the default in "entering appearance" the suit is liable to be heard ex parte, the defendant may not know or have notice when the suit is going to be heard.
But that is immaterial and that is a risk to which such a defendant makes himself open by such default.
But should he by any means whatever know that the suit is being heard from the undefended list he can nevertheless appear at such hearing and exercise the rights I have mentioned.
Rankin C.J. in the Court of appeal sees the possibility of cross examination in such a case by the defendant of plaintiff 's witnesses.
PG NO 350 I have not been able to persuade myself to take the view that a suit can only be defended by filing a written statement or by "entering appearance" under the Rules.
In my opinion filing of written statement is not the only way of defending a suit.
A defendant in my judgment may ably and successfully defend a suit against him by cross examination and arguments.
" In S.B. Trading Company Ltd. vs Olympia Trading Corpn.
Ltd., AIR 1952 Calcutta 685 Sarkar, J. (as His Lordship then was) had to consider the effect of strike off of defence under section 14(4) of the 1950 Act.
In that case, which was a suit for ejectment, the defence had been struck off as the defendants had not complied with an order made under section 14(4).
When the plaintiff proceeded to prove its claim for ejectment the defendants claimed to take part in the proceedings to oppose the decree for ejectment.
In the first place, they claimed that they were entitled to cross examine the plantiff 's witnesses and to address the court not as counsel but as agents of their clients.
The learned Judge declined the request.
He referred to the observations of P.B. Mukharji J. quoted earlier, that their rights were only aspects of the rights of defence and observed: "It seems to me that if I allow the defendants in this case to cross examine the plaintiff 's witnesses on their evidence as to the facts establishing the claim to ejectment and to address the Court with regard to that claim, I am really allowing the defendants to defend the claim against ejectment.
Section 14(4) says that this the defendants cannot do.
" The next question that arose was whether it was open to the defendants to contest the plaintiff 's claim that the defendant was not entitled to the benefit of the proviso to section 14(3).
The learned Judge also negatived this right.
He observed: "It would be a curious result and really would amount to annulling the provisions of sub section 4, if in spite of the defence being struck out, the defendants were in a position to contest the applicability of the proviso.
In my view, this latter argument of learned counsel for the plaintiff is plainly sound.
The proviso itself says that on certain things happening "the tenant shall not be entitled to the benefit of protection against eviction under this section.
"So, the proviso really contemplates a defence to the claim for ejectment, and if that defence is struck out, PG NO 351 it must necessarily mean that it is no longer open to the defendants to contest the existence of the facts giving rise to the applicability of the proviso.
I, therefore, reach the conclusion that the defendants will not be allowed to take any part in the proceedings for proof of the applicability of the proviso.
" The effect of a strike off of defence was expressed in even more forcible language by Chakravartti C.J.
In Gellatly vs Gannon, AIR 1953 Cal 409.
The learned Judge observed: "The language of section 14(4) is in no way qualified.
The policy of the section or, indeed, the whole Act seems to be that the Legislature is not minded to protect a tenant who will not even pay the monthly rent regularly.
If the tenant, on being directed to pay the current rent month by month, does not do so, the Act quite clearly provides that he will such conduct forfeit the special protection which the Act confers on tenants and will be relegated to his position the general law.
I do not find any justification in the language of section 14(4) to limit the defence against ejectment contemplated by it to defence against ejectment only on the ground mentioned in section 12(1)(i) of the Act.
" The question next arose before a Full Bench, consisting of section P. Mitra, C.J., M.M. Dutt, J. and A.K. De, J. in Gurudas Biswas vs Char Panna .
Seal, AIR 1977 Cal. 110 in the context of the 1956 Act.
One of the questions before the Full Bench was whether, in a suit for ejectment where the defence as to delivery of possession had been struckout under section 17(3) of the Act, the defendant could take thedefence of the non existence or invalidity of a notice under section 13(6) in the court below and in the court of appeal.
This question was answered in the affirmative, endorsing the conclusion reached in an of earlier decisions of the Court.
The reasoning was that the strike off only deprived the tenant of the special protection given to him under section 13(1) of the Act but did not preclude the necessity of the landlord having to prove the service of notice under section 13(6) of the Act which was a step to be taken before the filing of the suit.
The Court, however, observed: "To pass an ex parte decree in a suit for ejectment on or of the grounds in Section 13(1), the Court is required to decide, whether the suit is defended or not, (if the relation ship of landlord and tenant is not disputed as here PG NO 352 (a) whether the tenancy has been validly determined by a notice under Section 106, Transfer of Property Act, (b) whether a valid notice of suit was given before filing the suit (c) whether the ground alleged in the plaint to take away the tenant 's special protection conferred by Section 13(1), has been established on the evidence.
This is the requirement of Order 20, Rule 4, Civil Procedure Code, whether the suit is contested or not.
The Court cannot relieve itself of the necessity of complying with Order to, Rule 4 even if it strikes out the tenant s defence against delivery of possession or the written statement.
That being the position in law, it would be wrong, not to permit the tenant to contend and show, if possible, on plaintiffs evidence and materials as are on record, both at tile trial and also at the appeal stage, that the plaintiff is not entitled to the decree prayed for, though he would not be permitted either to cross examine plaintiffs witnesses, when they give evidence, or to call his own witnesses at the trial, if his defence is struck out. ' ' The above observations came up for consideration in Daya Moyee Sadhukhan vs Dal Singer Singh, AIR 1979 Cal 332.
In this case, on failure of the defendant to comply with the provisions of section l7(1) of the Act of 1956, his defence had been struck off.
Thereafter, at the hearing of the suit, the defendant was allowed to cross examine the plaintiff s husband On all issues but the defendant examined himself only on the question whether notice to quit i1ad been served properly in terms of section 106 of the Transfer of Property Act.
The landlord appellant argued before the High Court that as the defence had been struck out, the trial court was not justified in allowing the defendant to cross examine the plaintiff s witness and, in support of this contention reliance was placed on the observations in Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110.
M.M. Dutt, J., delivering the judgment of the Bench, observed that, strictly speaking, the observations relied upon did not relate to the points that had been posed before the Full Bench for consideration and hence had no binding force.
He proceeded to consider the question on general principles.
He referred to Order 9, Rr. 6 and 7 of the C.P.C., the decision in Sangram Singh vs Election Tribunal, ; , Order I I Rule 21 of the C.P.C., the decisions in Paradise Industrial Corpn.
vs M/s. Kiln plastics Products, (supra) and the observations in Babbar Sewing Machine Company vs Trilok Nath Mahajan, (supra) and concluded: PG NO 353 "It is true that the Supreme Court did not express, any opinion on the question, but it is apparent that the Supreme Court was inclined to hold that the defendant was, entitled to cross examine the witnesses of the plaintiff.
The above decisions of the Supreme Court do not support the observations made in the Full Bench case referred to above, namely, that when the defence of the defendant has been struck out he would not be permitted to cross examine the plaintiff 's witnesses when they give evidence.
In the circumstances we hold that in a case where the defence of the defendant is struck out under the provision of section 17(3) of the West Bengal Premises Tenancy Act, 1956, the defendant will be entitled to cross examine the plaintiff 's witnesses on all the points.
There can be no doubt that his defence as to the service of the notice to quit and of suit will remain unaffected by the striking out of his defence against delivery of possession and he will be entitled to adduce evidence in support of that defence.
In other words, the defendant will be entitled to participate in the proceedings and make his submissions against the plaintiff 's case for delivery of possession.
The learned Judge was, therefore, justified in allowing the defendant to cross examine the plaintiff 's witness and to adduce evidence by examining himself on the point of notice.
" This is the background against which the issue has to be considered by us.
It would be useful for a proper appreciation of the two views if, at this stage, we summarise the pros and cons of the situation.
The points urged for the plaintiff are (a) In a statute hedged in with all protection to a tenant against eviction, one important safeguard to the landlord is in this provision which seeks to assure him at least of the prompt payment of the rents lawfully due to him.
The tenant is compelled to pay up the rent on pain of losing his right of defence against ejectment.
This is a provision which should be strictly enforced and full effect given to this right of the landlord.
(b) Defence being struk off does not merely mean the exclusion of the written statement or the positive case, if any.
which the defendant wishes to plead.
It means also the exclusion of all modes of his participation in the suit qua the plea of ejectment.
Cross examination of the plaintiff 's witnesses and putting forth arguments demolishing the PG NO 354 plaintiff 's case are as crucial and vital parts of the defence as the putting in of a written statement or examination of his own witnesses.
(c) In like situations any similar default on the part of the plaintiff will spell the dismissal of his suit.
(Order 11 Rule 21 C.P.C.) On like analogy, the defendant in default should be made liable for ex parte eviction straightaway.
Restrictions are already placed on this right of the plaintiff by requiring that he has to establish his case by leading evidence to substantiate the same.
There is no justification for imposing on him further handicap of the defendant 's participation, even to a limited extent.
(d) The concession that the defendant can cross examine the plaintiff 's witnesses or put forward arguments to demolish the plaintiff 's case will lead to confusion and practical difficulties.
The pleas sought to be taken by the defence in section B. Trading Co. vs Olympia Trading Coprn.
Ltd., AIR 1952 Cal.
685 and in Bela Das vs Samarendra Nath Bose, ; (e) Apart from the view of Sarkar, J. and the decision of the Full Bench in Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110, the Patna High Court in Ganesh Ram vs Smt.
Ram Lakhan Devi, also has taken to similar view and held that such a defendant cannot be allowed to lead evidence in support of his pleas in defence.
(f) Under Order 8 Rule 5 of the C.P.C., when there is no written statement, the averments in the plaint are to be taken as correct and, if they are sufficient under the terms of the statute, a decree has to follow as a matter of course.
On the other hand, the aspects stressed by the defendant are: (a) The expression "defence being struck out" obviously relates to the consideration of a document being ruled out.
PG NO 355 It suggests that the intention is only that the written statement should be excluded from consideration.
Even treating the expression as equivalent to a direction that the court should proceed as if the defendant had not entered appearance at all, the tenant 's position cannot be worse than that of a similarly placed defendant under the Original Side Rules of the Calcutta High Court or under the C.P.C. (b) It is well established that mere absence of defence cannot make the plaintiff entitled to a decree straightaway.
Defence or no defence, the plaintiff in a suit has to satisfy the court that he has a case which deserves to be decreed.
In particular, in an eviction suit, under the rent laws, the court has to be satisfied that the statutory conditions justifying eviction are fulfilled.
This the plaintiff can establish only by leading evidence and such evidence will not be worth anything unless tested by cross examination.
The cross examination of the plaintiff 's witnesses is more an integral part of the plaintiff 's case than an aspect of defence.
(c) The Calcutta High Court has uniformly held that, even in an undefended action, a challenge on ground of non issue or invalidity of the notice under section 13(6) would be available to the defendant.
Though the notice has to be issued prior to the institution of a suit and, in this sense, is a pre condition to the filing of the suit, the non issue or invalidity is just one of the pleas that can be raised in defence.
If a tenant whose defence is struck off can raise that plea, there is no reason why he should not be allowed to do other things to show that the plaintiff is not entitled to a decree.
(d) The observations of this Court in Sangram Singh, Paradise Industrial Corpn.
and Eabbar Sewing Machine Company, (supra) are categorical and directly on this aspect of procedural law and deserve to be followed in the context of like provisions of tenancy legislations as well.
We have considered the contentions urged on behalf of both the parties and the respective view points of the two lines of decisions of the High Court.
We have also perused the decisions of this Court to which reference has been made.
Though none of them is a direct decision on the issue before us, the observations made, in so far as they enunciate general principles and relate to analogous statutory provisions are most helpful and instructive.
After PG NO 356 giving careful thought to all the aspects, we have come to the conclusion that the view expressed in the case under appeal by Ramendra Mohan Dutta, Acting Chief Justice, is preferable to the view taken by the other two learned Judges.
It is a more liberal and equitable view and also one consistent with the requirements of justice in such cases.
We proceed now to set out the reasons for our conclusion.
A provision like the one in section 17(4) is a provision in terrorem.
It penalises the defendant for certain defaults of his.
As pointed out by the decisions earlier referred to, the court will act with great circumspection before striking out the defence of a tenant under this provision.
This Court has interpreted provisions like this in rent acts to say that striking off of defence is not obligatory on the court merely because there is a default and that it is a matter for exercise of great judicial restraint.
But it does not necessarily follow that, once the defence is struck off, the defendant is completely helpless and that his conduct of the case should be so crippled as to render a decree against him inevitable.
To hold so would be to impose on him a punishment disproportionate to his default.
The observations made by this Court, while discussing the provisions of the Code of Civil Procedure, and the Original Side rules of the Calcutta High Court which deal with some what analogous situations, cannot be lightly brushed aside.
I hose decisions have enunciated a general equitable principle.
We are also of the same view that provisions of this type should be construed strictly and that the disabilities of a person in default should he limited to the minimum extent consistent with the requirements of justice.
This should be all the more so in the context of a tenancy legislation.
the main object of which is to confer protection on tenants against eviction by the landlord.
unless certain statutory conditions are fulfilled.
I he provisions should not be given any wider operation than could have been strictly intended by the legislature.
It has already been noticed that, in the Calcutta High Court.
there has been unanimity on the point that, even where defence is struck out, the validity of the notice under section 13(6) is challengeable.
This has been the settled view of that court for several years now which it would be inequitable to disturb after such a long time.
This type of cases, however, has been sought to be distinguished on the ground that such notice is a condition precedent to the institution of the suit and cannot perhaps be described as a defence to the suit.
This, however, is too tenuous a distinction.
For, in truth and substance the plea regarding the validity of the notice has invariably to be taken as a plea in defence in such suits.
The rule, therefore, is PG NO 357 really an exception to the strict application of a rule that a tenant whose defence is struck off cannot be heard at all against the plea of ejectment.
We agree that full effect should be given to the words that defence against ejectment is struck off.
But does this really deprive the defendant tenant of further participation in the case in any manner? While it is true that, in a broad sense, the right of defence takes in, within its canvass, all aspects including the demolition of the plaintiff 's case by the cross examination of his witnesses, it would be equally correct to say that the cross examination of the plaintiff 's witnesses really constitutes a finishing touch which completes the plaintiff 's case.
It is a well established proposition that no oral testimony can be considered satisfactory or valid unless it is tested by cross examination.
The mere statement of the plaintiff 's witnesses cannot constitute the plaintiff 's evidence in the case unless and until it is tested by cross examination.
The right of the defence to cross examine the plaintiff 's witnesses can, therefore, be looked upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff 's evidence cannot be acted upon.
Looked at from this point of view it should be possible to take the view that, though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating to the court that the plaintiff 's witnesses are not speaking the truth or that the evidence put forward by the plaintiff is not sufficient to fulfill the terms of the statute.
To us it appears that the basic principle that where a plaintiff comes to the court he must prove his case should not be whittled down even in a case where no defendant appears.
It will at once be clear that to say that the Court can only do this by looking the plaintiff 's evidence and pleadings supplemented by such questions as the court may consider necessary and to completely eliminate any type of assistance from the defendant in this task will place the court under a great handicap in discovering the truth or otherwise of the plaintiff 's statements.
For after all, the court on its own motion, can do very little to ascertain the truth or otherwise of the plaintiff 's averments and it is only the opposite party that will be more familiar with the detailed facts of a particular case and that can assist the court in pointing out defects, weaknesses, errors and inconsistencies of the plaintiff 's case.
We, therefore, think that the defendant should be allowed his right of cross examination and arguments.
But we are equally clear that this right should be subject to PG NO 358 certain important safeguards.
The first of these is that the defendant cannot be allowed to lead his own evidence.
None of the observations or decisions cited have gone to the extent of suggesting that, inspite of the fact that the defence has been struck off, the defendant can adduce evidence of his own or try to substantiate his own case.
Secondly, there is force in the apprehension that if one permits cross examination of the plaintiff 's witnesses by the defendant whose defence is struck off, procedural chaos may result unless great case is exercised and that it may be very difficult to keep the cross examination within the limits of the principles discussed earlier.
Under the guise of cross examination and purported demolition of the plaintiff 's case, the defendant may attempt to put forward pleas of his own.
To perceive quickly the difference between questions put out to elicit a reply from the plaintiff which may derogate from his own case and questions put out to substantiate pleas in defence which the defendant may have in mind and to restrict the cross examination to its limits will be not easy task.
We think, however, that this is a difficulty of procedure, rather than substance.
As pointed out by Ramendra Mohan Dutta, J. this is a matter to be sorted out in practical application rather than by laying down a hard and fast rule of exclusion.
A third safeguard which we would like to impose is based on the observations of this court in Sangram Singh 's case.
As pointed out therein, the essence of the matter in all such cases is that the latitude that may be extended by the court to the defendant inspite of his not having filed a written statement, should not cause prejudice to the plaintiff.
Where the defendant does not file a written statement or where he does not appear to contest the case the plaintiff proceeds on the basis that there is no real opposition and contents himself by letting in just enough evidence to establish a prima facie case.
Therefore, the court should ensure that by permitting the defendant at a later stage either to cross examine the witnesses or to participate in the proceeding the plaintiff is not taken by surprise or gravely prejudiced.
This difficulty however can be easily overcome in practice, because there is a wide discretion with the court and it is always open to the court, where it believes that the plaintiff has been misled, to exercise its discretion to shut out cross examination or to regulate it in such manner as to avoid any real prejudice to the interests of the plaintiff.
An objection to our above conclusion has been raised on the basis of the provisions of Order VIII of the Code of Civil Procedure.
Rules 1, 5 and 10 of this Order have been PG NO 359 recently amended by the Amendment Act of 1976.
We find nothing in these rules which will support the contention urged on behalf of the respondents.
Rule 1 merely requires that the defendant should present a written statement of his defence within the time permitted by the court.
Under rule 5(2), where the defendant has not filed a pleading it shall be lawful for the court to pronounce judgment on the basis of the facts contained in the plaint except against a person under disability but the court may in its discretion require any such fact to be proved.
Again under rule 10 when any party from whom a written statement is required fails to present the same within the time permitted or fixed by the court, the court "shall pronounce judgment against him or make such order in relation to the suit as it thinks fit.
" It will be seen that these rules are only permissive in nature.
They enable the court in an appropriate case to pronounce a decree straightaway on the basis of the plaint and the averments contained therein.
Though the present language of rule 10 says that the court "shall" pronounce judgment against him, it is obvious from the language of the rule that there is still an option with the court either to pronounce judgment on the basis of the plaint against the defendant or to make such other appropriate order as the court may think fit.
Therefore, there is nothing in these rules, which makes it mandatory for the court to pass a decree in favour of the plaintiff straightaway because a written statement has not been filed.
Reference was made before us to sub rule 1 of rule 5.
This sub rule, however, has application only in a case where a pleading is filed but does not contain a specific or implicit denial of the averments contained in the plaint or other document to which it is a reply.
Rule 5(1) cannot be made use of to sustain the contention that where there is no written statement the court is bound to accept the statements contained in the plaint and pass a decree straightaway.
These provisions of the Code of Civil Procedure, far from supporting the contentions of the plaintiff that a decree on the basis of the plaint should follow a failure to file the written statement.
rather indicate a contrary position, namely, that even in such cases, it is a matter for the court to exercise a discretion as to the manner in which the further proceedings should take place.
We, therefore, do not think that the terms of Order VIII in any way conflict with the conclusion reached by us.
For the above reasons, we agree with the view of Ramendra Mohan Dutta, ACJ that, even in a case where the defence against delivery of possession of a tenant is struck off under section 17(4) of the Act, the defendant, subject to the exercise of an appropriate discretion by the court on the facts of a particular case, would generally be entitled: PG NO 360 (A) to cross examine the plaintiff 's witnesses; and (b) to address argument on the basis of the plaintiff 's case.
We would like to make it clear that the defendant would not be entitled to lead any evidence of his own nor can his cross examination be permitted to travel beyond the very limited objective of pointing out the falsity or weaknesses of the plaintiff 's case.
In no circumstances should the cross examination be permitted to travel beyond this legitimate scope and to convert itself virtually into a presentation of the defendant 's case either directly or in the form of suggestions put to the plaintiff 's witnesses.
For reasons mentioned above, we allow the appeal and restore the suit before the trial Judge for being proceeded with in the light of the above conclusions.
We direct that the costs of this appeal will form part of the costs in the suit and will abide by the result thereof.
S.L. Appeal allowed. | The respondent flied a suit in the High Court for a decree directing the defendant (appellant) to deliver possession of certain premises.
The appellant tenant filed its written statement.
During the pendency of the suit, orders were passed directing the appellant tenant to deposit certain sums in Court.
The tenant made an application for permission to deposit the arrears of rent in monthly instalments alongwith the current rents.
No orders were passed on this application on the ground of its being out of time.
Subsequent to the disposal of this application, the defence of the tenant was struck out under section 17 of the Act.
The tenant/appellant moved this Court.
Allowing the appeal, the Court, HELD: A provision as in section 17(4) is a provision in terrorem, The Court will act with circumspection before striking out the defence of a tenant under this provision.
This Court has interpreted provisions like this in rent acts to say that striking out defence is not obligatory on the Court merely because there is a default and that it is a matter for exercise of great restraint.
But it does not necessarily follow that once the defence is struck off, the defendant is completely helpless and his conduct of the case should be so crippled as to render a decree against him inevitable.
To hold so would be to impose on him a punishment disproportionate to his default.
[356B D] Provisions of this type should be construed strictly and the disabilities of a person in default should be limited to the minimum extent consistent with the requirements of justice.
This should be all the more so in the context of tenancy legislation, the main purpose of which is to confer protection on the tenants against eviction by the landlord, unless certain statutory conditions are fulfilled.
The provisions should not be given any wider wider operation than could have been strictly intended by the legislature.
[356E F] PG NO 333 PG NO 334 In truth and substance, the plea regarding the validity of the notice has invariably to be taken as a plea in defence in such suits.
The rule is really an exception to the strict application of a rule that a tenant whose defence is struck out cannot be heard at all against the plea of ejectment.
[356H; 357A] Full effect should be given to the words that defence against ejectment is struck off.
But while it is true that, in a broad sense, the right of defence takes in all aspects including the demolition of the plaintiff 's case by cross examination of his witnesses, it is equally correct that the cross examination of the plaintiff 's witnesses really constitutes a finishing touch which completes the plaintiff 's case.
No oral testimony can be considered satisfactory or valid unless it is tested by cross examination.
Mere statement of plaintiff 's witnesses cannot constitute plaintiff 's evidence unless it is tested by cross examination.
The right of defence to cross examine plaintiff 's witnesses can be looked upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff 's evidence cannot be acted upon.
Thus it should be possible to take the view that though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating that the plaintiff 's witnesses are not speaking the truth or that the evidence put forward by the plaintiff is not sufficient to fulfill the terms of the statute.
[357B D] The basic principle that where a plaintiff comes to court he must prove his case should not be whittled down even in a case where no defendant appears.
[357E] The defendant should be allowed his right of cross examination and arguments.
This right should be subject to certain important safeguards.
[357H; 358A] First.
the defendant cannot be allowed to lead his own evidence.
[358A] Secondly, if cross examination is permitted of the plaintiff 's witnesses by the defendant whose defence is struck off, procedural chaos may result unless great care is exercised and it may be very diffcult to keep the cross examination within limits.
But this is a difficulty of procedure rather than substance.
It is a matter to be sorted out in practical application rather than by laying down a hard and fast rule of exclusion.
[358B D] Thirdly, the latitude that may be extended by the Court to the defendant inspite of his not having filed a written statement should not cause prejudice to the plaintiff.
The PG NO 335 Court should ensure that by permitting the defendant at a later stage either to cross examine the witnesses or participate in the proceeding, the plaintiff is not taken by surprise or gravely prejudiced; there is a wide discretion with the court and it is open to the court where it believes that the plaintiff has been misled, to exercise its discretion to shut out cross examination or regulate it in such manner as to avoid any real prejudice to the interests of plaintiff.
[358E; F G] Even in a case where the defence against delivery of possession of a tenant is struck off under section 17(4) of the Act, the defendant, subject to the exercise of an appropriate discretion by the court on the facts of a particular case, would generally be entitled to (a) cross examine the plaintiff 's witnesses, and (b) address argument on the basis of the plaintiff 's case.
The defendant would not be entitled to lead any evidence of his own nor can his cross examination be permitted to travel beyond the very limited objective of pointing out the falsity or weaknesses of the plaintiff 's case.
In no circumstances should the cross examination be permitted to convert itself virtually into a presentation of the defendant 's case either directly or in the form of suggestions put to the plaintiff 's witnesses.
[359G H; 360B C] K.K. Chari vs R.H. Seshadri, AIR ; ; Inder Mohan Lal vs Ramesh Khanna, ; ; Sangram Singh vs Election Tribunal, Kotah, Bhuray Lal Bava, ; ; M/s. Paradise Industrial Corpn.
vs M/s. Kiln Plastics Products, ; ; M/s. Babbar Sewing Machine Company vs Trilok Nath Mahajan, ; Ram Chand vs Delhi Cloth & General Mills Co. Ltd., ; ; Shyamcharan Sharma vs Dharamdass, ; ; Ram Murti vs Bhola Nath, ; Bela Das & Ors.
vs Samarendra Nath Bose; , ; S.N. Banerjee vs H.S. Suhrawardy, AIR 1928 Cal.
772; Dabendra Nath Dutt vs Smt.
Satyabala Dassi & Ors., AIR 1950 Cal.
217; S.B. Trading Company Ltd. vs Olympic Trading Corpn.
Ltd., AIR 1952 Calcutta 685; Gellatty vs Cannon, AIR 1953 Cal. 409; Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110; Daya Moyee Sadhukhan vs Dal Singer Singh, AIR 1979 Cal.
332; Sangram Singh vs Election Tribunal, ; and Ganesh Ram vs Smt.
Ram Lakhan Devi, , referred to. |
minal Appeal No. 187 of 1965.
Appeal by special leave from the judgment and order dated August 3, 1965 of the Allahabad High Court in Criminal Misc.
Contempt Case No. 7 of 1965.
U. P. Singh and D. N. Mishra, for the appellant.
Sobhagmal Jain, section P. Singh and J. P. Goyal, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
The appellant is the manager of Hiralal Memo rial Intermediate College, Bhaurauli, in the District of Azamgarh.
The respondent was the principal of the College.
On December 14, 1963 the respondent drew from the Boys ' Fund of the college two sums of Rs. 189 for payment of scholarship to the two Harijan students for, the period from May to November 1963.
On withdrawal of the monies he sent to the Harijan.
Tatha Samaj Kalyan Adhikari a form called Form No. 14 to the Adhikari containing a receipt of the scholarship signed by the two students and counter signed by himself.
The Adhikari wrote to the appellant informing him of the complaint.
made by the students that in spite of the submission of Form No. 14 they had not received the scholarship.
On March 24, 1964 the District Inspector of Schools visited the College and on finding that the scholarships had not been paid called for an explanation for nonpayment.
On April 10, 1964 the appellant forwarded the Inspector 's letter of March 24 to the respondent and asked him to give an, explanation.
The respondent sent a reply stating that payments were made to the students on March 31, 1964 and that the delay in payment was due to the absence of the students from the College and the fact that the register on which receipts had to be obtained were with the Inspector from December. 8, 1963 to March 10, 1964.
A meeting of the managing committee was called on April 14, 1964 to consider the Inspector 's letter and the respondent 's explanation.
According to the appellant, on April 19, 1964 the managing committee met and resolved to take disciplinary action against the respondent.
On April 21, 1964 the appellant passed an order suspending the respondent pending the inquiry.
The order stated that it was passed in exercise of the power vested in the appellant by the rules and the resolution of the managing committee dated April 19, 1964.
A copy of the resolution was attached.
On April 24, 1964 the respondent filed a writ petition in the High Court of Allahabad praying for appropriate writs quashing the order of suspension.
He alleged that the appellant had no authority to pass the order and that the order was made in bad faith.
On the same date the respondent obtained an ex parte order from the High Court 136 staying the, operation of the suspension order.
On July 22, 1964 after hearing both the parties the High Court vacated the stay order.
On December 25, 1964 the appellant served a charge,sheet on the respondent.
Charge No. (IV) was as follows "The scholars hip amounts of Rs. 216/25 and Rs. 216/25 of Sri Karam Deo Ram and Sri Jai Raj Ram students of Class XII for the months of May 1963 to November 1963 were withdrawn by you on 14 12 1963 but the same have neither been disbursed to the students concerned nor refunded to the, Treasury.
Thus you are guilty for misappropriation of the aforesaid amount.
Evidence which is proposed to be considered in support of the charge : 1.
Letter of D.J.O., dated 24 3 1964.
Letter of H.W.O., dated 31 3 1964.
Statement of students.
Thus it is evidently clear that you being entrusted with the aforesaid money have dishonestly misappropriated the amount for your own use and the poor students have been put to loss by your misconduct.
As such you have committed criminal breach of trust dis honestly punishable under sec.
406 I.P.C." The respondent was required to submit his explanation by January 24, 1965.
Instead of submitting his explanation the respondent filed a petition in the High Court asking for committal of the appellant for contempt of court.
His contention was that the aforesaid charge was the subject matter of inquiry in the pending writ petition, and that as the respondent had launched a parallel inquiry in the matter he had committed contempt of court.
The 'High Court accepted the contention and held that the respondent 'was guilty of contempt of court and directed him to pay a fine .,of
Rs. 500 and costs.
The respondent has filed this appeal after , obtaining special leave from this Court.
The conditions of service of the teachers in the College are governed by sec.
16 G of the Intermediate Education Act, 1921.
(U.P. Act 11 of 1921) and the Regulations framed thereunder. 'Regulations 31 to 45 provide for punishment, inquiry and suspension.
The Committee of Management is the, punishing ,authority.
The punishments of dismissal, removal, discharge and reduction in rank and dimunition in emoluments require prior approval of the Inspector.
If it is decided to take disciplinary action against an employee, the inquiry is made by an authority :appointed by the committee.
The ground on which it is proposed 137 to take action is reduced in the form of definite charges.
The charges are communicated to the employee, who is required to submit a written statement of his defence.
If the employee or the inquiring authority so desires, an oral inquiry takes place.
The inquiring authority then makes a report.
On receipt of the report the punishing authority takes its decision on the case.
On receipt of the decision of the committee the Inspector gives his decision.
The Committee then implements the decision of the Inspector.
The Regulations indicate definite time limits for the communica tion of the charge, submission of the written statement of defence,completion of the inquiry, the making of the report by the inquiring authority, the taking of decisions by the punishing authority and the Inspector and the implementation of the decision.
Pending the inquiry and final orders, the employee may be suspended by the committee.
The power of suspension may be exercised by the manager if it is delegated to him under the rules of the institution.
The employee under suspension is paid a subsistence allowance of an amount equal to half his pay.
The issue in the disciplinary proceedings is whether the em ployee is guilty of the charges on which it is proposed to take action against him.
The same issue may arise for decision in a civil or criminal proceeding pending in a court.
But the pendency of the court proceeding does not bar the taking of disciplinary action.
The power of taking such action is vested in the disciplinary authority.
The civil or criminal court has no such power.
The initiation and continuation of disciplinary proceedings in good faith is not calculated to obstruct or interfere with the course of justice in the pending court proceeding.
The employee is free to move the court for an order restraining the continuance of the disciplinary proceedings.
If he obtains a stay order, a wilful violation of the order would of course amount to contempt of court.
In the absence of a stay order the disciplinary authority is free to exercise its lawful powers.
An authority holding an inquiry in good faith in exercise of the powers vested in it by statutory regulations is not guilty of contempt of court, merely because a parallel inquiry is imminent or pending before a court.
In Tukaram Gaokar vs section AT.Shukla(1) this Court held that the initiation and continuance of proceedings for imposition of penalty on the appellant for his alleged complicity in the smuggling of gold under sec.
112(b) of the Sea did not amount to a contempt of court though his trial in a criminal court for offences under sec.
135(b) of that Act and other similar offences was imminent and identical issues would arise in the proceedings before the customs authorities and in the trial before the criminal court.
This Court observed (1) ; 138 "To constitute contempt of court, there must be involved some 'act done or writing published calculated to bring a court or a judge of the court into contempt or to lower his authority ' or 'something calculated to obstruct or interfere with the due course of justice or the lawful process of the court. ' Reg.
vs Gray(1) Arthur Reginald Perors vs The King(2).
The customs officers did nothing of this kind.
They are acting bona fide discharging their statutory duties under sections 111 and 112.
The power of adjudicating penalty and confiscation under those sections is vested in them alone.
The criminal court cannot make this adjudication.
The issue of the show cause notice and proceedings there under are authorised by the Act and are not calculated to obstruct the course of justice in any Court.
We see no justification for holding that the proceedings amount to contempt of court.
" In Re: Shr Mehra(3) the High Court of Madhya Pradesh held that the bona fide holding of a departmental inquiry on a charge of misappropriation against a government servant did not amount to contempt of court merely because a criminal prosecution on the same charge was pending against him.
A fortiori the inquiry cannot amount to contempt court if it is not a parallel investigation on a matter pending before a court, see Saibal Kumar Gupta V. B. K. Sen(4).
In Delhi Cloth and General Mills Ltd. vs Kaushal Bhan(5) and Tata Oil Mills Co., Ltd., vs The Workmen(6) the Court held that a domestic inquiry by the employer into the charges against a workman was not vitiated because it was held during the pendency of a criminal trial into the same or similar charges.
It may be desirable to stay the domestic inquiry pending the final disposal of the criminal case but the inquiry could not be characterised as mala fide merely because it was held during the pendencY of the criminal proceedings.
In The King vs Parmanand(7) a Full Bench of the Patna High Court held that the giving or withholding of consent to the withdrawal of the prosecution under sec.
494 of the Code of Criminal Procedure was a judicial act and it was improper for the court to permit withdrawal of the prosecution on orders of the Government without making any attempt to exercise its discretion, that the power to grant adjournments of pending proceedings under section 344 of the Code and the power to call for records in A pending or completed case under secs.
423, 435 of the (1) [1900] 2Q.B.36.
(2) (1951] A.C.482.488.
(3) A.I.R, 1962 M.P.72.
(4) ; (5) [1960] 3S.C.R.227.
(6) ; (7) A.I.R. 1949 Pat 282.
139 Code and the general rules and circular orders were vested in the court and not in executive officers.
Those questions do not arise for decision in this case.
Narayan, J. in a separate judgment observed that in an inquiry with regard to a matter which is sub judice was bound to interfere with the even and ordinary course of justice and a parallel inquiry of this kind would amount to opening the door for contempt.
In that case the executive officers were issuing orders to the criminal court calling for its records and asking it to adjourn the proceedings and to consent to the withdrawal of the prosecution and on those facts it might be possible to hold that the officers were guilty of contempt.
But we cannot agree with the broad observation that a parallel inquiry on a matter pending before a court necessarily amounts to a contempt of court.
We think that an inquiry by a domestic tribunal in good faith into the charges against an employee does not amount to contempt of court merely because an inquiry into the same charges is pending before a civil or criminal court.
In D. J. Shield vs
Ramesam (1) the Andhra Pradesh High Court agreed with the observations of Narayan, J. but the decision is distinguishable because the court found that the inquiry by the Collector into the charges against a sub magistrate was not a parallel inquiry and did not amount to contempt of court.
After the High Court vacated the stay order the appellant bona fide believed that the disciplinary proceedings could be continued.
The service of the charge sheet on the respondent was made in good faith and was not intended or calculated to interfere with the court proceedings.
We are inclined to think that the respondent instituted the contempt proceeding with ulterior motives.
He was under suspension and was drawing half pay for doing nothing.
His intention was to delay the inquiry into the charges against him.
Having failed to obtain the stay order he launched the contempt proceeding so that the inquiry might be indefinitely held up.
In view of the order under appeal he has successfully delayed the inquiry so far.
In the result, we allow the appeal, set aside the judgment and order of the High Court dated August 3, 1965 and dismiss the petition filed under the Contempt of Courts Act.
Y.P. Appeal allowed (1) A. 1. | Pending an inquiry into the conduct of the respondent Principal of a college in respect of certain allegations, the respondent was suspended.
The respondent filed a writ petition in the High Court to quash the order of suspension and also obtained ex parte stay against the continuation of the inquiry.
The ex parte stay was vacated.
Thereafter the appellant manager of the college, served a charge sheet on the respondent and called upon him to explain the allegations.
The respondent moved the High Court for holding the appellant guilty of contempt of Court.
The High Court held the appellant guilty of contempt of Court.
In appeal, this Court.
HELD:The appeal must be allowed.
An authority holding an inquiry in good faith in exercise of the powers vested in it by statutory eegulations is not guilty of contempt of Court, merely because a parallel inquiry is imminent or pending before a Court.
The issue in the disciplinary proceedings is whether the employee is guilty of the charges on which it is proposed to take action against him.
The same issue may arise for decision in a civil or criminal proceeding pending in a Court.
But the pendency of the court proceeding does not bar the taking of disciplinary action.
The power of taking such action is vested in the disciplinary authority.
The civil or criminal court has no such power.
The initiation and continuation of disciplinary proceedings in good faith is not calculated to obstruct or interfere with the course of justice in the pending court proceeding.
The employee is free to move the court for an order restraining the continuance of the disciplinary proceedings.
If he obtains a stay order, a wilful violation of the order would of course amount to contempt of court.
In the absence of a stay order the dirciplinary authority is free to exercise its lawful powers.
[137D G] In this case, after the stay order was vacated by the High Court, the appellant bona fide believed that the disciplinary proceedings could be continued, and the charge sheet was served in good faith and was not intended or calculated to, interfere with the court proceedings.
Rather the respondent instituted the contempt proceedings with ulterior motives to indefinitely hold up the inquiry after having failed to obtain the stay order.
[139 E F] Tukaram Gaokar vs section N. Shukla, ; , Reg, vs Gray, , Arthur Reginald Perors vs The King , 488, Re : Shri Mehra A.I.R. 1962 M.P. 72; Saibal Kumar Gupta vs B. K. Sen ; ; Delhi Cloth and General Mills Ltd., vs Kaushal Bhan, ; ; Tata Oil Mills Co., Ltd. vs The Workmen, A.I.R. 1965 S.C. 155; The King vs Parmanand, A.I.R. 1949 Pat. 282; D. J. Shield vs Ramesam, A.T.R. 1955 Andhra Pradesh, 156 referred to. 135 |
minal Appeal No. 157 of 1965.
Appeal by special leave from the judgment and order dated February 1, 1965 of the Punjab High Court in Criminal Misc.
No. 8 of 1964 in Cr.
Revision No. 1375 of 1963.
Nishat Singh Grewal, Ravindra Bana and O. P. Rana, for the appellants.
R. N. Sachthey, for the respondent No. 2.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the High Court of Punjab dismissing Criminal Miscellaneous Petition No. 8 of 1964.
This petition arose out of the following facts.
Bhagwant Rai and Chhota Ram were tried, under section 325, I.P.C., read with section 34, I.P.C., in the Court of Shri Harish Chander Gaur, Magistrate 1st Class, Patiala.
Ajaib Singh, Sub Inspector, one of the appellants before us, had investigated the case.
The Magistrate, by his order dated April 5. 1957, acquitted both the accused and, inter alia, observed that Bhagwant Rai had been falsely implicated in the case as he was not even present on the, day of the occurrence at Patiala.
On the application of Bhagwant Rai, Shri Joginder Singh 'Karam garhia ', Magistrate 1st Class, Patiala, who succeeded Shri Harish Chander Gaur, filed a complaint under sections 193, 195, 211 and 120B, I.P.C., on October 31, 1958, against six persons including the appellants, Ajaib Singh and Malkiat Singh.
Shri O. P. Gaur.
Magistrate First Class, by his order dated June 1, 1959, discharged the accused, holding that the complaint was not competent as it was barred by sub section
(6) of section 479A, Cr.
P.C., because the, complaint had not been filed by or directed to be filed by Shri Harish Chander Gaur, who had disposed of the case ending in the acquittal of Bhagwant Rai.
In the revision filed against this order the Additional Sessions Judge upheld this view.
The High Court (Capoor, J.), on revision, found it unnecessary to consider the, scope of section 479A, Cr.
P.C., vis a vis section 476, Cr. P.C., because two of the offences mentioned in the complaint, namely.
s.211 and section 120B, I.P.C., did not fall within the purview of s.479A. Capoor, J., further held that section 42 of the Police Act.1861, had no application to a case in which a complaint was made by the Court under section 476, Cr.
P.C. Capoor, J., also held that as the order of Shri Joginder Singh, Magistrate, directing the making of the complaint against the respondents was not appealed from and had become final, the competency of the Court to make the complaint under section 211, I.P.C., against Jaswant Singh, one of the accused, could not be considered at that stage.
The High 147 Court accordingly set aside the order of the learned Additional Sessions Judge and directed that the respondents be proceeded against according to law.
On the case going back fresh objections were filed before the Magistrate trying the case but these were overruled.
Revision was filed before the Additional Sessions Judge who accepted the prayer of Kirpal Singh and recommended to the High Court that the criminal proceedings pending against him in the Court of Magistrate First Class, Patiala. might be quashed.
He, however, declined to interfere with the proceedings pending against the appellants mainly on the ground that the objections now taken by them before the Trial Magistrate had been heard and finally disposed of by Capoor, J., in his order dated April 4, 1961.
In the meantime, the appellants put in Criminal Miscellane ous Petition No. 8 of 1964, in criminal revision, in the High Court, praying that along with the recommendation made by the learned Additional Sessions Judge, Patiala, for quashing the criminal proceedings against Kirpal Singh, the grounds urged by them might also be taken into consideration.
Capoor, J., accepted the recommendation made by the learned Additional Sessions Judge, Patiala, and quashed the criminal proceedings against Kirpal Singh.
He, however, directed that Criminal Miscellaneous Petition No. 8 of 1964 should be placed before another Bench for disposal.
The matter was then placed before Sharma, J., who held that all the points urged in Criminal Miscellaneous Petition had been taken into consideration and repelled by Capoor, J., in his order dated April 4, 1961.
Sharma, J., observed : "The learned counsel, however, omitted to take note of the fact that the revision petition finally was accepted in the terms, 'As the order under revision is not legally sustainable, it must be set aside and the respondents must be proceeded with according to law. ' Therefore, what the order (said) was that the criminal case as a whole was to proceed against all the respondents and so the petitioners could not be heard now to say that the case was remanded to the trial court for trial of the respondents for offences punishable under sections 211 and 120 B of the Indian Penal Code.
In the circumstances, the trial Court cannot be said to have misconstrued the order of Capoor, J., The other grounds urged by them in the Criminal Miscellaneous as already pointed out by me were taken into consideration by Capoor, J., and findings given against the petitioners and that being so, these cannot be agitated again at this stage.
" 148 He accordingly dismissed the Criminal Miscellaneous Petition.
The appellants having obtained special leave, the appeal is now before us.
The learned counsel for the appellants contends that on the facts prosecution for offences under sections 193 and 195, I.P.C., was barred under section 479A(6), Cr.
In our opinion, this contention must be accepted in view of the ruling of this Court in Shabir Hussain Bholu vs State of Maharashtra(1) and Baban Singh vs
Jagdish Singh(2).
The learned counsel next contends that the complaint could only be filed by the Magistrate before whom the original proceedings were taken.
He says that according to section 195 (1) (b), Cr. P.C., a complaint in respect of sections 193, 195 and 211 I.P.C., can only be made by the Court in which the proceedings out of which the offences arose took place.
We see no force in this contention.
Section 559 enables a successor in office of a Magistrate to file a complaint.
The relevant portion of section 559 reads as follows : "559.
(1) Subject to the other provisions of this Code, the powers and duties of a Judge or Magistrate may be exercised or performed by his successor in office.
(2) When there is any doubt as to who is the successor in office of any Magistrate, the Chief Presidency Magistrate in a Presidency town, and the District Magistrate outside such towns, shall determine by order in writing the Magistrate who shall, for the purposes of this Code or of any.
proceedings or order thereunder, be deemed to be the successor in office of such Magistrate." This section was substituted for the original section 559 by the Code of Criminal Procedure (Amendment) Act (XVIII of 1923).
Since the amendment it has been held, and we think rightly, that a successor in office of a Magistrate can file a complaint under section 476, Cr.
P.C., in respect of an offence under section 195, I.P.C., committed before his predecessor.
(See Behram vs Emperor(3) Bara Bapen Manjhi vs Gopi Manjhi(4) and In re: Subramaniam Chettiar(5).
This section applies to all Magistrates and there is no reason why the plain terms of the section should be cut down to limit it, as suggested by the learned counsel for the appellant, to Magistrates whose courts are permanent.
It seems to us further clear that sub s.(2) has not the effect of limiting s.559(1).Section 559(2) applies when there is a doubt as (1) [1963] Supp. 1 S.C.R. 501.
(3) 108.
(2) A.I. R. (4) A. 1.
R. 1927 Pat.
(5) A. 1.
R. 149 to who the successor is, and that doubt can be resolved in the manner laid down in sub section
The sub section does not mean, as contended by the learned counsel, that until a successor is determined under sub section
(2) there is no successor for the purposes of sub section
If there is no doubt about who the successor is, then that person can exercise the powers under sub section
We accordingly hold that the complaint was properly filed by Shri Joginder Singh 'Karamgarhia ', Magistrate.
There is equally no force in the third point raised by ,,he learned counsel that section 42, Police Act, creates a bar and the prosecution is time barred under this section.
This Court held in Mulud Ahmed, vs State of U.P. (1) that section 42, Police Act, does_not apply to prosecutions under the Indian Penal Code or other Acts.
Subba Rao, J., as he then was, observed "The period of three months prescribed for commencing a prosecution under this section is only with respect to prosecution of a person for something done or intended to be done by him under the provisions of the Police Act or under general Police powers given by the Act.
Section 42 does not apply to prosecution against any person for anything done under the provisions of any other Act.
A combined reading of these provisions leads to the conclusion that section 42 only applies to a prosecution against a person for an offence committed under the Police Act. but the prosecution in the present case was for an offence under section 212 of the Indian Penal Code which is an offence under a different act and for which a much higher punishment is pres cribed.
By reason of section 36 of the Police Act, section 42 thereof cannot apply to such a prosecution.
" The fourth point which the learned counsel urges is that the complaint only discloses two offences under section 193 and section 195, I.P.C., and no other, and it was an abuse of the process of the Court.
There is no force in this contention as the complaint on its face mentions sections 193, 195, 211 and 120B.
The learned counsel finally urges that the complaint had been filed because of a private feud and it is not in the interest of justice that the complainant should be allowed to proceed with the complaint.
This point was not taken in the High Court at any stage and we do not allow it to be raised at this stage.
In the result the appeal fails and is dismissed.
Y.P. Appeal dismissed.
(1) [1963] Supp. 2 S.C.R. 38, 44 45. | A magistrate acquitted Bhagwant Rai of the charge under sections 325/34 I.P.C. and observed that he had been falsely implicated.
The magistrate 's successor in office the respondent filed a complaint under sections 193, 195, 211 and 120B I.P.C., against the appellants.
The appellants con tended that (i) prosecution for offences under sections 193 and 195 I.P.C., was barred under section 479A(6) Cr.
P.C.; (ii) according to section 195(1)(b) Cr.
P.C., only the Magistrate before whom the original proceedings were taken could file the complaint in respect of sections 193, 195 and 211 IPC;(iii)s.
42 of the Police Act barred the prosecution as it was commenced after the period prescribed; and (iv) the complaint only disclosed two offences under sections 193 and 195 I.P.C. and no other.
HELD:The appeal must be dismissed.
(i) In view of the ruling of this Court in Shabir Husain Bholu vs State of Maharashtra and Baban Singh vs Jagdish Singh, the prosecution for offences under sections 1913 and 195 IPC was barred under section 479A(6) Cr.
P.C. [148 B] (ii) The complaint was properly filed by the successor in office of the Magistrate.
Section 559 Cr.
P.C. enables a successor in office of a Magistrate do file, a complaint.
This section applies to all Magistrates.
and there is no reason to limit it to Magistrates whose courts are perma nent.
Sub section
(2) has not the effect of limiting section 559(1).
Section 559(2) applies when there is a doubt as to who the successor is, and that doubt can be resolved in the manner laid down in sub s.(2).
The subsection does not mean that until a successor is determined under sub s.(2) there is no successor for the purpose of sub section
[148 F H;149 A] Behram vs
Emperor, 108; Bara Bapen Manihi vs Gopi Manjhi, A.I.R. 1927 Pat.
(In re: Subramanian Chettiar, A.I.R. 1957 Mad. 442, followed.
(iii) Section 42 of the police Act does not apply to prosecutions under the Indian Penal Code or other Acts.
[149 C] Mulad Ahmad vs State of U.P., [1963] Supp. 2 S.C.R. 38, 44 45 followed.
(iv) As the complaint on the face of it mentioned sections 193, 195, 211 and 120B, so there was no force.
in the contention that the complaint only disclosed two offences under sections 193 and 195 I.P.C. and no other F149 F] 146 |
APPEAL No. 667 of 1965.
Appeal from the Judgment and Order dated April 28, 1961 of the Madhya Pradesh High Court in First Appeal No. 180 of 1959.
413 S.T. Desai, V.D. Mishra and A.G. Ratnaparkhi, for the appellants.
N. Shroff, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
In this appeal from the decision of the High Court of Madhya Pradesh in First Appeal NO. 180 of 1959 on its file the principal question that arises for decision is as to the market value of the appellants ' orchard acquired under the provisions of Land Acquisition Act 1894 (to be hereinafter referred to as the Act) in connection with the construction of Hirakud Dam in Orissa State.
Several lands in the Raigarh District of Madhya Pradesh were acquired by the Collector of Raigarh in pursuance of the request made by the Government of Orissa.
Among the lands so acquired some of the appellants ' lands were also included.
For those lands the appellants ' claimed compensation in a sum of Rs. 7,95,770/ under various heads but the Special Land Acquisition Officer under two different awards awarded to them a sum of Rs. 59,494/6/ .
The appellants did not agree to the award made by the Special Land Acquisition Officer and at their instance the question of compensation was referred to the District Court of Raigarh under section 18 of the Act.
The Additional District Judge who tried the reference in question enhanced the compensation payable to the appellants to Rs. 3,29,480/ .
In particular he valued the trees in the orchard acquired at Rs. 2,19.220/ .
Aggrieved by the decision of the learned Additional District Judge, the Collector of Raigarh appealed to the High Court of Madhya Pradesh.
In that appeal the appellants filed a memorandum of cross objections praying for the enhancement of the compensation payable to them.
The High Court substantially modified the decree of ,the learned Additional District Judge.
It determined the compensation payable to the appellants at Rs. 1,47,751/7/ with interest as provided in the decree.
Against that decision the appellants have brought this appeal after obtaining a certificate under article 133(1)(a) of the Constitution.
As mentioned earlier the principal question arising for decision is as regards the true compensation payable in respect of the orchard in question.
In that orchard admittedly there were 160 Orange trees, 41 Mosambi trees.
, 250 Gauva trees apart from other trees.
The learned Additional District Judge valued each one of the Orange and Mosambi trees at Rs. 960/ and Gauva tree at Rs. 240/ .
There is no dispute as regards the number of trees in the orchard.
In that orchard apart from the Orange, Mosambi and Gauva trees, there were some other trees but we need not concern ourselves about those trees as no dispute was raised before us either as to .their number or value .
The learned L12 Sup C1/68 12 414 Additional District Judge computed the net income from each Orange tree at Rs. 100/ and of Mosambi at Rs. 70/ to 80/ per year.
He capitalised that income at 12 years ' purchase and thus arrived.
at the compensation payable in respect of those trees.
doing he heavily relied on the oral evidence adduced by the appellants.
We may mention at this stage that there was absolutely no documentary evidence to support the claim of the appellants.
The evidence of the first appellant as well as that of the witnesses did not commend itself to the learned Judges of the High Court.
They opined that the claim of the appellants was a highly exaggerated one and the evidence of the witnesses supporting that claim is unacceptable.
Relying on certain official reports and the pamphlets published by certain individuals as to the yield from Orange, Mosambi and Gauva trees, average span of life of those trees and the market value of Orange, Mosambi and Guava, the High Court re assessed the compensation payable and came to the conclusion that the total value of the trees in the orchard in question could be reasonably fixed at Rs. 58,566/ .
Mr. 8.
T. Desai, learned Counsel for the appellants complained that the High Court was not right in looking into documents which were not a part of the records of the case particularly when his clients had not been given any opportunity to rebut the conclusions ' reached therein.
It appears that these documents were looked into by the learned Judges after the conclusion of the arguments.
If the High Court wanted to take into consideration any fresh evidence, it should have admitted the same in accordance with law.
In that event, the appellants would have got opportunity to rebut that evidence.
That having not been done, we do not think it was open to the High Court to rely on those document.
We accordingly exclude from consideration those documents.
But that is of no assistance to the appellants.
As mentioned earlier, the High Court has refused to rely on the oral testimony adduced in support of the appellants ' claim as regards the value of the orchard.
It is true that the witnesses examined on behalf the appellants have not been effectively cross examined.
It is also true that the Collector had not adduced any evidence in rebuttal; but that does not mean that the court is bound to accept their evidence.
The Judges are not computers.
In assessing the value to be attached to oral evidence, they are bound to call into aid their experience of life.
As Judges of fact, it was open to the appellate Judges to test the evidence placed before them on the basis of probabilities.
We have been taken through the evidence of the witnesses.
We are in agreement with the learned Judges of the High Court 415 that the evidence in question is unacceptable.
It may be that the garden in question was in a very good condition but it must be remembered that the garden was just 2 acres and 49 cents in extent.
It is not possible for us to persuade ourselves to believe that the value of about Rs. 59,000/ allowed by the High Court for that garden is by any measure inadequate.
It is true that the conclusion of the High Court as regards the valuation of the garden rests on inadmissible evidence but the appellants cannot complain about that.
If the evidence adduced by the appellants is rejected as has been done by the High Court then the valuation made by the Special Land Acquisition Officer should have remained but that valuation has been substantially enhanced by the High Court by relying on inadmissible evidence.
The Government had not appealed against that decision.
Therefore the decision of the High Court in that regard stands.
The High Court in our opinion was wrong in disallowing the statutory allowance permitted by section 23(2) over the value of the trees.
The High Court erred in thinking that the value of the trees falls under the secondly clause of section 23 (1).
The first clause of section 23 provides for determining the market value of the land acquired.
Section 3(a) prescribes that "the expression 'land ' includes benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth" ' Therefore the trees that were standing in the land were a component part of the land acquired.
The High Court failed to notice that what was acquired are not the trees but the land as such.
The value of the trees was ascertained only for the purpose of fixing the market value of the land.
On the value of the land as determined, the court was bound to allow the 15% allowance provided by section 23(2) of the Act.
In Sub Collector of Godavari vs Seragam Subbaroyadu and ' Ors.(x) the High Court of Madras held that the trees standing on the land acquired are 'things 'attached to the earth and hence they are included in the definition of land in section 3(a) ' and that definition must apply in construing section 23 of the Act.
It further held that the value of the trees as are on the land when the declaration is made under section 6 must be included in the market value of the land on which the allowance of 15 % should be given under section 23(2) of the Act.
The same view was taken by the Allahabad High Court in Krishna Bai vs The Secretary of State for India in Council(g).
We are satisfied that these decisions lay down the law correctly.
No decision taking a contrary view was brought to our notice.
The only other contention taken on behalf of the appellants is as regards the costs.
Both ,the trial court as well as the High (1)I.L.R. 1907 Mad.p.
(2) (42) I.L.R. 1920 All.
P. 555.
416 Court directed the parties to bear their own costs.
Mr. Desai contended that the compensation awarded by the Land Acquisition Officer having been substantially enhanced by 0those courts, they were bound to award his clients costs to the extent of their success.
Costs are essentially in the discretion of the courts.
Both the trial court as well as the High Court have given good reasons in support of their order as to costs.
The claim made by the appellants was a highly exaggerated one.
The bulk of the evidence adduced by them was found to be unacceptable.
Under those circumstances, the courts thought that the appellants should not be granted any costs, We see no reason to interfere with that order.
In the result this appeal is partly allowed.
In addition to the compensation awarded by the High Court, the appellants will get the statutory allowance of 15% on the value of the trees standing on the acquired land i.e., they will get 15% allowance on a sum of Rs. 58,752/ .
In other respects this appeal fails.
There will be no order as to costs. | The appellants ' lands consisting of orchards were acquired under the Land Acquisition Act.
1894 and they were awarded compensation.
The appellants, were dissatisfied with the amount, so it was referred to the District Court, which enhanced it.
The respondent appealed to the High Court.
The High Court looked into: documents which were not a part of the records of the case and also did not give any opportunity to the appellants to rebut the conclusions reached on the basis of those documents.
The High Court held that value of the trees fell under the secondly clause of section 23(1) therefore disallowed the 15% allowance permitted by section 23(2) and directed the parties to bear their own costs.
In appeal, this Court, HELD: The High Court was wrong in disallowing the statutory allowance permitted by section 23(2) over the value of the trees in the orchard.
Section 3(a) prescribed that "the expression 'land ' includes benefits.
to arise out of land, and things attached to the earth".
Therefore the trees that were standing in the land were a component part of the land acquired.
The High Court failed to notice that what was acquired was not the trees but the land as such.
The value of trees was ascertained only for the purpose of .fixing the market value of the land.
On the value of the land as determined, the court was bound to allow the 15% allowance provided by section 23(2) of the Act.
[415 D F] Sub Collector of Godavari vs Seragam Subbareyadu & Ors., I.L.R. 1907, Mad.
p. 151, approved.
(ii) The High Court was not right in looking into.
fresh documents.
If the court wanted to take into consideration any fresh evidence, it should have admitted the same in accordance with law.
So these documents ought to have been excluded from consideration, though it was of no assistance to the appellants.
[414 D F] (iii) There was no reason to interfere with the orders as regards costs.
Costs are essentially in the discretion of the courts.
The claim of the appellants was a highly exaggerated one, and the bulk of the evidence adduced by them was found to.
be unacceptable.
Under those circumstances.
the courts thought that the appellants should not be granted any costs.
[416 B] |
Appeal No. 323 of 1965.
Appeal by special leave from the judgment and decree dated February 16, 1961 of the Patna High Court in Appeal from Original Decree No. 500 of 1955.
S.C. Agarwal, K.N.K. Nair, Anil Kumar Gupta and S.P. Singh, for the appellants.
418 Sarjoo Prasad and U.P. Singh, for respondent No. 1.
The Judgment of the Court was delivered by Bachawat, J.
The Bihar Subai Sunni Majlis e Awaqaf a body corporate established under the Bihar Wakfs Act, 1947 instituted a suit or setting aside a registered mokarrari lease deed dated November 18, 1949 executed by defendant No. 4 Sheikh Gholam Bari in favour of defendants 1 to 3 and for restoration of possession of the properties covered by the document, viz., the houses and shops being holdings Nos. 27 and 28 formerly known as holdings Nos. 22 and 23 in Ward No. 8 at Mohalla Muradpore P.S. Pirbahore in the city of Patna (Baakipur).
The plaintiff 's case is that the properties were dedicated by way of waqf by a waqfnama dated August 20, 1827 executed by Mst.
Bibi Mannu Khanam Jan. The successive Mutawallis under this deed were Sheikh Azmatullah, Sheikh Ataullah, Sheikh Habibur Rahman, Bibi Zaibunnissa and Sheikh Gholam Bari.
The Trial Court decreed the suit and this decree was confirmed by the High Court.
Both the courts concurrently found that Mst.
Bibi Mannu Khanam Jan dedicated the properties by way of waqf by a deed dated August 20, 1827.
The correctness of this finding is challenged in this appeal.
In Mohalla Muradpore in the city of Patna (Baakipur) there is an ancient mosque known as the mosque of Mst.
Bibi Mannu Khanam Jan. It is not disputed now that Mst.
Bibi Mannu Khanam Jan established this mosque.
There are shops, rooms, katra and other structures to the east, west and the south of the mosque.
To the east of the mosque are the disputed holdings Nos. 27 and 28.
On September 25, 1948 Gholam Bari filed before the Waqf Board a return in Form No. 1 under Rules 6 and 11 of the Bihar Waqfs Act, 1948.
In this return he stated that the properties were given in waqf to the mosque by Mst.
Bibi Mannu Khanam/an under the deed of waqf dated August 20, 1827.
With this return he filed an English translation of the wakf deed.
The translation was attested by him.
P.W. 5 Mehdi Hasan, the Nazir of the Waqf Board proved that Gholam Bari also filed the original waqf nama together with its copy in Persian.
The copy bore the following endorsement signed by Gholam Bari: 'The copy corresponds to the original. ' The original waqfnama was returned to Gholam Bari and the copy was retained in the office of the Waqf Board.
At the trial Gholam Bari did not produce the original deed.
Accordingly the copy of the deed and its translation were exhibited.
The Trial Court and in the High Court Misra J. accepted the testimony of Mehdi Hasan and held that the copy of the original waqfnama was admissible in evidence.
We agree with this finding.
Tarkeshwarnath J. ruled that the copy was not admissible mainly on the ground that paragraph 7 of the plaint stated that the deed of waqf was in the plaintiff 's custody.
We agree with Misra J. that the averment in the plaint should be regarded as a general statement referring to the true copy which was left in the plaintiff 's office.
Under sec.
65(a) of the Evidence Act secondary evidence may be given of the existence, or contents of a document when the original is shown or appears to be in the possession or power of the person against whom the document is sought to be proved, and when after the notice mentioned in sec.
66, such person does not produce it.
Where the case falls under section 65(a) any secondary evidence of the contents of the document is admissible.
In the present case the conditions of section 65(a) were satisfied.
The plain copy of the waqf was therefore admissible.
On behalf of the appellant it was argued ,that el.
(f) of section 65 was applicable and that as the certified copy of the deed dated August 20, 1827 was permitted by the Evidence Act to be given in evidence, a certified copy alone was admissible in evidence.
There is no substance in this contention.
If the case falls under clause (a) any secondary evidence of the document is admissible, though the case may also fall under clause (f).
Clause (a) is not controlled by clause (f).
In the case of A Collision Between The Ava(1) a question arose as to whether secondary evidence could be given of the contents of a certificate granted by the Board of Trade.
The loss of the document attracted cl.
(c) of sec.
65 and the failure to produce it after notice attracted cl.
(a) Cl.
(f) of sec.
65 was also applicable.
Wilson J. ruled that a certified copy need not be produced and any secondary evidence was admissible.
We agree with this decision.
Wilson J. said: "By section 65 in cases under cls.
(a) and (c) any secondary evidence is admissible; in cases under cls.
(e) and (f) only a certified copy.
The present case falls under cl.
(a) or (c) and also under (f).
In such a case which rule applies ? I think the words, 'In cases (a), (c) and (d) any secondary evidence is admissible, ' are too clear and too strong to be controlled by anything that follows, and that, therefore, in this case any secondary evidence might be received.
" The existence of the deed of waqf dated August 20, 1827 is proved by numerous admissions made by Gholam Bari and his predecessors in title.
The existence of the deed was admitted in a petition filed by Bibi Zaibunnisa before ,the District Judge, Patna on January 13, 1928, in the return filed before the plaintiff by Gholam Bari on September 25, 1948, in the petition dated February 15, 1949 and a statement dated March 21, 1949 filed by him before the President of the Bihar Subai Sunni Majlis e Awaqaf.
(1) I.L.R. 420 Other documents and admissions also clearly show that the disputed holdings are waqf properties.
The copy of the waqf deed shows that Bibi Mannu Khanam Jan appeared before the Darulquazaya Azimabad for admitting the execution and making a declaration and the Quazi signed the deed and put the seal of the Registry office on 21st Rabiul Awal.
1233 A.H.
The year 1233 is evidently a mistake for 1243.
The deed was executed on 19th Muharram 1243 A.H. corresponding to 20th August 1827.
No copy of this deed is now found in the records of the registration office.
It appears that the document was presented for registration under Regulation XXXIX of 1793.
Under that Regulation the Quaz is were required to keep copies of all deeds and other papers which they might draw up or attest, to keep a list of such papers and to deliver the list and papers to their successors.
The Regulation made no provision for the maintenance of a proper register book.
The disputed waqf deed was registered in 1827.
At this distance of time no copy of the deed is traceable in the registration office.
But from other unimpeachable evidence, it is satisfactorily established that Mst.
Bibi Mannu Khanam Jan executed the waqf deed dated August 20, 1827 and that the disputed holdings are waqf properties.
In this view of the matter it is not disputed that the courts below rightly decreed the suit.
V.P.S. Appeal dismissed. | The 1st respondent waqf filed a suit against the appellants 'and the 3rd respondent, for setting aside a lease deed executed by the 3rd respondent in favour of the appellants, on the ground that the properties covered by the lease deed were waqf properties dedicated by a deed of waqf of the year 1827.
The existence of the deed of waqf was proved by numerous 'admissions by the 3rd respondent and others who were its mutawallis.
The 3rd respondent had produced the original deed along with the return filed by him before the Waqf Board under rr. 6 and 11 made under the Bihar Waqfs Act, 1948, and stated that the properties in dispute were waqf properties.
He also produced a plain copy in Persian and an English translation of the original deed of waqf.
He attested the English translation and made an endorsement on the Persian copy that it corresponded to the original.
The original, after comparison.
was returned to him, and the copy and translation were retained in the office of Waqf Board.
At the triaL, the 3rd respondent did not produce the original even though a notice was issued to him for its production.
No copy of the deed was traceable in the registration office.
The first respondent, therefore, relied upon the copy and the translation in the office of the Waqf Board.
The high Court decreed the suit and the High Court confirmed the decree.
In the appeal to this Court, on the question whether the copy was admissible in evidence to show that the disputed properties were waqf properties, HELD: The case fell under section 65(a) of the Evidence Act and so the copy was admissible, since any secondary evidence of the existence and contents of the original document was admissible.
Though the case may also fall under section 65(f), it is not necessary to produce a certified copy of the deed as el.
(a) is not controlled by cl.
The copy as well as other unimpeachable evidence established that the disputed properties were waqf properties.
[419 D E; 420 D] In the matter of a collision between the 'Ava ' and the Brenhilda Cal.
568, approved. |
Appeal No. 1005 of 1965.
Appeal from the judgment and decree dated April 24, 1962, of the Allahabad High Court in First Appeal No. 205 of 1950.
E.C. Agarwala and P.C. Agarwala, for the appellant.
V.A. Seyid Muhammad and S.P. Nayar, for respondent No. 1.
The Judgment of the Court was delivered by Hegde, J.
The only question that arises for decision in this appeal by certificate is whether the High Court is right in holding that the notice issued by the appellant plaintiff under section 80, Civil 451 Procedure Code is defective and therefore the suit is not maintainable.
The plaintiff dispatched on July 29, 1947 certain copper articles from Gujranwala through North Western Railway to a place called Aghawanpur near Moradabad.
That consignment never reached the destination.
Consequently the plaintiff claimed a sum of P.s. 13,880 as damages.
The learned Civil Judge, Moradabad, who tried the suit decreed the plaintiffs claim in a sum of Rs. 10,206/9/ with interest at six per cent from 15th August 1947 till the date of realisation.
As against that decision, the union of India went up in appeal to the High Court of Allahabad.
The decree of the trial court was assailed on several grounds one of them being that the notice issued under section 80, Civil Procedure Code is invalid.
The High Court accepted the contention of the Union of India that the notice in question is invalid but rejected the other pleas advanced on its behalf.
It accordingly allowed the appeal and dismissed the suit on the sole ground that the notice issued did not comply with the requirements of section 80, Civil procedure Code.
It is not disputed that at the relevant time, the plaintiff carried on his business at Gujranwala under the name and style of Raghunath Das Mulkhraj.
He was the sole proprietor of that concern.
He sent several notices to the concerned authorities demanding compensation for his goods lost in transit.
It is not necessary to refer to all the notices issued by the plaintiff.
It is sufficient for our purpose if we consider the legality of the last notice sent by him viz. on June 19, 1948.
If that notice is valid then undoubtedly the suit is maintainable.
The notice in question reads thus: "From: M/s. Raghunath Dass Mulkhraj, C/o.
Dr. Khamani Singh, Katghar Gan Khana, Moradabad.
To: The General Manager, East Indian Railway, Calcutta.
A notice like this has already been given to the Secretary, Central Government of India, New Delhi and now it is being given to you according to Amendment in the procedure code.
We have the honour to serve you with the following notice under section 80, Civil Procedure Code.
The facts leading upto the said notice are as follows: 1.
That we are the refugees of Gujranwala (West Punjab) and now residing in Katghar, Gari Khana, Moradabad.
452 2.
That under R.R. No. 550240, dated 29th July 1947 Ex Gujranwala to.
Agwanpur weighing 52 bundles 73 mds.
29 seers were booked from Gujranwala to Agwanpur.
That the aforesaid consignment has not been delivered to us so far due to the Railway 's negligence, misconduct and gross carelessness.
That the non delivery of the said consignment we have suffered a great loss and damage.
That on 14th October 1947, we preferred a claim against the Railway and claimed the sum of Rs. 12,554/1 for the loss non delivery of the aforesaid goods.
Price of the goods . .
Rs. 10206 9 Our profit 20% thereon . .
Rs. 2041 5 Our damage for the much money locked up @ 1% p.m.
Rs. 306 3 TOTAL: .
Rs. 12554 1 6.
That the Chief Commercial Manager, E. 1.
Railway by his letter No. A 2/5196/47, dated 25th November 1947 acknowledged the receipt of our claim.
That thereafter nothing was heard from him in spite of our several reminders and requests for early payment.
That so far the goods have not been delivered to us nor our claim in respect thereof settled and paid.
Hence this notice is served to you.
That now we claim the sum of Rs. 1331/10 as detailed above inclusive damage @ 1% till 26th June 1948.
That the cause of action for this notice and the suit to be filed here after arose at Moradabad (U.P.) which is the District where the goods ought to have been delivered on or about 13th August 1947 when the same should have been delivered and thereafter on the various dates mentioned in the correspondence and on the expiry of the period of this notice.
That we nope and will request you to please pay to us the amount of the claim at an early date and not to force us to go to the law courts in our present and 453 plight in which case you and the Railway will be responsible and liable for all our costs and damages.
Yours faithfully, For M/s. Raghunath Dass Mulkhraj Sd./: Raghunath Dass Proprietor Dated: Copy to: Chief Commercial Manager, Calcutta." The High Court held that the notice in question does not meet the requirements of the law as the person who issued the notice is not the same person who filed the suit.
In so deciding it heavily relied on the decision of this Court in S.N. Dutt vs Union of India.
( 1 ) Section 80, Civil Procedure Code requires, among other things, that the notice must state the name, description and place of residence of the plaintiff.
It is true that the notice purports to emanate from M/s. Raghunath Dass MuLkhraj.
It is also true that in the body of the notice in several places the expression 'we ' is used.
Further the plaintiff had purported to sign for M/s. Raghunath Dass Mulkhraj.
But at the same time he signed the notice as the proprietor of the concern "Raghunath Dass Mulkhrai".
That is a clear indication of the fact that "Raghunath Dass Mulkhraj" is a proprietary concern and the plaintiff is its proprietor.
Whatever doubts that might have been possibly created in the mind of the recipient of that notice, after going through the body of the notice as to the identity of the would be plaintiff, the same would have been resolved after going through the notice as a whole.
In the plaint, the plaintiff definitely stated that he was carrying on his business under the name and style of "Raghunath Dass Mulkhraj" meaning thereby that the concern known as "Raghunath Das Mulkhraj" is a proprietary concern and the name given to it is only a trade name.
He had also stated in the plaint that he had given a notice under section 80 of the Civil Procedure Code.
In the written statement filed on behalf of the Dominion of India, the validity of the notice issued was not challenged.
Regarding the notice in question.
the only averment in the written statement is that found.
in paragraph 8 therein and the same "That the suit is.
barred by section 80, C.P.C. as no notice under that section appears to have been served on this administration.
" From this it follows that the Dominion of India did not challenge the validity of the notice.
It is no more in dispute that the notice (1) ; 454 sent by the plaintiff had been served on the authorities concerned.
The Union of India did not take the plea that the identical person who issued the notice had not instituted the suit.
The object of the notice contemplated by that section is to give to the concerned Governments and public officers opportunity ' to reconsider the legal position and to make amends or settle the claim, if so advised without litigation.
The legislative intention behind that section in our opinion is that public money and time should not be wasted on unnecessary litigation and the Government and the public officers should be given a reasonable opportunity to examine the claim made against them lest they should be drawn into avoidable litigations.
The purpose of law is advancement of justice.
The provisions in section 80, Civil Procedure Code are not intended to.
be used as booby traps against ignorant and illiterate persons.
In this case we are concerned with a narrow question.
Has the person mentioned in the notice as plainsong brought the present suit or is he someone else ? This question has to be decided by reading the notice as a whole in a reasonable manner.
In Dhian Singh Sobha Singh and anr.
vs The Union of India(1) this Court observed that while the terms of section 80 of the Civil Procedure Code must be strictly complied with that does not mean that the terms of the section should be construed in a pedantic manner or in a manner completely divorced from common sense.
The relevant passage from that judgment is set out below: "We are constrained to observe that the approach of the High Court to this question was not well founded.
The Privy Council no doubt laid down in Bhagchand Dagadusa rs.
Secretary of State that the terms of section should be strictly complied with.
That does not however mean that the terms of the notice should be scrutinised in a pedantic manner or in a manner completely divorced from common sense.
As was stated by Pollock C.B. in Jones vs Nicholls, "we must import a little common sense into notices of this kind." Beaumont C.J. also observed in Chandu Lal Vadilal vs Government of Bombay "One must construe section 80 with some regard to common sense and to the object with which it appears to have been passed.
" It is proper to expect that the authorities who received the notice would have imported some common sense into it.
At any rate they should have done so and we must assume that they did.
The fact that they did not object to the validity of the notice in (1) ; , 795. 455.
their pleadings shows that they never considered the person who brought the suit as being someone other than who issued the notice.
It is the contention of Mr. Seyid Mohammad, learned Counsel for the Union of India that the present case falls within the rule laid down by this Court in S.N. Dutt vs Union of India(1).
We are not persuaded that it is so.
In S.N. Dutt 's case a notice was.
sent by a lawyer on behalf of the concern known as S.N. Dutt & Co. The notice in question did not indicate either specifically or by necessary implication that the concern in question is a proprietary concern and S.N. Dutt was its sole proprietor.
Referring to that notice, this Court observed "The prima facie impression from reading the notices would be that Messrs. S.N. Dutt & Co. was some kind of partnership firm and notices were being given in the name of that partnership firm.
It cannot therefore be said, on a comparison of the notices in this case with the plaint that there is identity of the person who issued the notice with the person who brought the suit.
" Further in that case the defendant challenged the validity of the notice right from the beginning.
In the present case the Union of India could not have been left with the impression that the notice had been issued on behalf of a partnership firm.
There are clear indications in the notice showing that the plaintiff was the sole proprietor of the concern known as "Raghunath Dass Mulkhraj".
Hence the decision in S.N. Dutt 's case does not govern the case before us.
In the result we allow this appeal, set aside the judgment of the High Court and restore the judgment and decree of the trial court.
The Union of India shall pay the costs of the appellant both in this Court as well as in the High Court.
G.C. Appeal allowed. | The appellant was the sole proprietor of a business carried on by him under the name and style of M/s. Raghunath Dass Mulkhraj.
He sent a notice under section 80 C.P.C. on behalf of 'M/s. Raghunath Dass Mulkhraj to the General Manager East Indian Railway Calcutta in connection with a claim for compensation for lost goods.
The notice was signed by him as proprietor 'for M/s. Raghunath Dass Mulkhraj '.
When he subsequently filed a suit against the Railway its maintainability was challenged on the ground that the notice under section 80 was invalid, as there was no identity between the person who sent the notice and the person who filed the suit.
The suit was decreed by the trial Court but the plea that the notice was invalid was accepted by the High Court.
The appellant with certificate, came to this Court.
HELD: The object of the notice contemplated by section 80 is to give to the concerned Governments and public officers opportunity to reconsider the legal position and to make amends or settle the claim, if so advised without litigation so that public time and money may not be wasted.
The provisions in section 80 Civil Procedure Code are not intended to be used as boobytraps against ignorant and illiterate persons.
[454 B C] In the present case although the notice has been sent under the appellant 's trade name he had clearly indicated that he 'signed it as the proprietor of the business.
The notice had to be read as a whole and in a manner not divorced from common sense.
So read the notice could not have given the Union of India the impression that it was issued on behalf of a partnership concern.
The High Court had wrongly held that the notice was invalid.
[454 H, 455 E] S.N. Dutt vs Union of India, ; , distinguished.
Dhian Singh Sobha Singh and Anr.
vs The Union of India, ; , 795, relied on |
Appeal No. 605 of 1966.
Appeal by special leave from the judgment and decree dated March 27, 1964 of the Allahabad High Court in Special Appeal No. 322 of 1964.
E.C. Agarwala and E. Udayarathnam, for the appellant.
M.C. Chagla and P.C. Agrawala, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
The appellant is a partnership firm consisting of two brothers Lala Baburam and Shri Prakash Chandra, carrying on the business of manufacturing Khandsari sugar in the district of Muzaffarnagar.
The partnership firm carries on its business through its two units (1) one located in the village Basera and run under the name and style of M/s. Baburam Ashok Kumar and (2) the other located in village Morna and run under the name and style of M/s. Baburam Prakash Chandra, both in the district of Muzaffarnagar.
The case of the appellant was that the business of manufacturing Khandsari was seasonal and was carried on at both the places for less than 5 months in a year, i.e., from the month of November to the beginning of April.
Under the U.P. District Boards Act No. X of 1922, the District Board of Muzaffarnagar was empowered to levy tax under sections 108 and.
114 in the rural area.
Section 114 was to the following effect: "The power of a board to impose a tax on circumstances and property shall be subject to the following conditions and restrictions namely : (a) The tax may be imposed on any person residing or carrying on business in the rural area provided that such person has so resided or carried on business for a 520 total period of at least six months in the year under assessment.
(b) The total amount of tax imposed on any person shall not exceed such maximum (if any) as may be prescribed by rule.
Under section 123 of that Act the matters relating to the assessment and collection of taxes were to be governed by rules framed under section 172 of that Act.
On March 1,.
1928, the Government of U.P. issued notification No. 315/LX 413 notifying the rules for the rules for the assessment and collection of a tax on circumstances and property in the rural area of the Muzaffarnagar district.
The rules provided, among other matters, that all the activities of an assessee within the district, whether carried on under the same or different name, shall be considered in calculating the total amount to be assessed; and the tax shall be assessed by an Assessing Officer appointed by the District Board, and the list of assessment of the preceding year ending December 31, shall be completed on or before January 20, and shall be submitted to the Board which will return it by February 15 to the Assessing Officer for being revised and thereafter the Assessing Officer shah give notice of a date not less than one month when he will proceed to consider the objection.
The assessee may file objections before the date fixed and thereafter the Assessing Officer shall allow the assessee an opportunity to be heard.
Rule 16 read with Rule 2 fixed the maximum limit of the total amount of tax assessed on any person not to exceed Rs. 2,000/ in any year, having regard to all the activities of an assessee within the district whether carried on under the same or a different name.
In the year 1950 the Constitution of India was promulgated and under el. 2 of article 276 the total amount payable in respect of any one person to the district board, local Board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two hundred and fifty rupees per annum.
On August 22, 1958, the U.P. Antarim Zila Parishad Act of 1958 (U.P. Act No. XXII of 1958) passed by the U.P. Legislature received the assent of the Governor and was published in the U.P. Gazette dated August 23, 1958.
Clause (3) of section 1 of the U.P. Antarim Zila Parishad Act, 1958 runs as follows : "It shall be deemed to have come into force on the 29th day of April, 1958, and shall expire on the 31st day of December, 1959.
" But the Amending Act (U.P. Act No. 1 of 1960) received the assent of the Governor on January 5, 1960 whereby the figure 1960 was substituted in place of 1959 in el.
(3) of section 1 of U.P. Act XXII of 1958.
The case of the appellant is that the original 521 Act No. XXII of 1958 had expired on December 31, 1959 and as such could not be revived on January 5; 1960 when the Amending Act No. 1 of 1960 received the assent of the Governor and that fresh legislation was necessary.
On March 20, 1960, a copy of the Assessment Order assessing the appellant to the maximum amount of Rs. 2,000/ as circumstances and property tax for the assessment year 1959 60 was issued by the Antarim Zila Parishad Muzaffarnagar.
The assessment order was issued by Shri O.P. Varma purporting to act as a Taxing Officer of the Antarim Zila Parishad.
Aggrieved by the assessment order, the appellant filed a Civil Miscellaneous Writ Petition No. 1780 of 1960 in the Allahabad High Court challenging the authority of the respondent Antarim Zila Parishad to impose the tax and praying for the grant of a writ to quash the said assessment order.
The writ petition was summarily dismissed on July 21, 1960 by Jagdish Sahai, J. on a preliminary point that the appellant had a right to appeal to the prescribed authority under section 128 of U.P. Act No. X of 1922.
The appellant thereafter preferred a Special Appeal No. 452 of 1960 in the Allahabad High Court against the order of Jagdish Sahai, J. which was also dismissed on the ground that the appellant had an alternative remedy of appeal.
During the pendency of the Special Appeal No. 452 of 1960, another new Act, namely the U.P. Kshetra Samitis and Zila Parishads Adhiniyam of 1961 (i.e., the U.P. Act No. XXXII of 1961).was passed by the U.P. Legislature and on November 29, 1961 received the assent of the President of India.
The case of the appellant is that on January 15, 1962, without giving any notice or inviting any objections, the Taxing Officer Shri O.P. Verma passed the assessment order for 1961 62 in respect of the circumstances and property tax regarding the Basera Unit.
Being aggrieved by the two separate assessment orders of Rs. 2000/ each in respect of the two units of Morana and Basera for the years 1961 62, the.
appellant filed again in the Allahabad High Court a writ petition No. 2371 of 1962 under article 226 of the Constitution.
The writ petition was summarily dismissed by section N. Dwivedi, 1.
on, February 13, 1964.
The appellant took the matter in appeal in.
Special Appel No. 322 of 1964 but the Special Appeal was dismissed by the Division Bench on March 27, 1964 on the ground ' that the appellant had not availed himself of the alternative remedy by way of appeal.
The present appeal is brought to this Court by special leave from the judgment of the Division Bench of the Allahabad High Court dated March 27, 1964 in Special ' Appeal No. 322 of 1964.
The sole argument presented on behalf of the appellant is that the High Court was in error in holding that an appeal under the U.P. District Boards Act No. X of 1922 was an adequate and efficacious remedy and that the appellant should have exhausted ' the statutory remedy before applying for a writ under article 226 of the Constitution.
522 It is a well established proposition of law that when an alternative and equally efficacious remedy is open to a litigant he should be required to pursue that remedy and not to invoke the special jurisdiction of the High Court to issue a prerogative writ.
It is true that the existence of a statutory remedy does not affect the jurisdiction of the High Court to issue a writ.
But, as observed by this Court in Rashid Ahmed vs The Municipal Board, Kairana(1), "the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs" and where such a remedy exists it will be a sound exercise of discretion to refuse to interfere.
in a writ petition unless there are good grounds therefore.
But it should be remembered that the rule of exhaustion of statutory remedies before a writ is granted is a rule of self imposed limitation, a rule of policy, and discretion rather than a rule of law and the court may therefore in exceptional cases issue a writ such as a writ of certiorari notwithstanding the fact that the statutory remedies have not been exhausted.
In The State of Uttar Pradesh vs Mohammad Nooh(2), S.R. Das, C.J., speaking for the Court, observed: "In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy.
It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute.
(Halsbury 's Laws of England, 3rd Ed., Vol.
II, p. 130 and the cases cited there).
The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in ' arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any.
But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party.
had other adequate legal remedies.
In the King vs Postmaster .
General Ex parte Carmichael a certiorari was issued although the aggrieved party had and alternative remedy by way of appeal.
It has been held ' that the superior court will readily issue a certiorari in a case where there has been a denial of natural justice before a court of summary jurisdiction.
(1) ; (2) ; , 605.
523 case of Rex vs Wandsworth Justices Ex parte Read is an authority in point.
In that case a man had been convicted in a court of summary jurisdiction without giving him an opportunity of being heard.
It Was held that his remedy was not by a case stated or by an appeal before the quarter sessions but by application to the High Court for an order of certiorari to remove and quash the conviction.
" There are at least two well recognised exceptions to .the doctrine with regard to the exhaustion of statutory remedies.
In the first place, it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the High Court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course. (See the decisions of this Court in Carl Still G.m.b.H.v.
The State Bihar(1) and The Bengal Immunity Co. Ltd. vs The State Bihar(2).
In the second place, the doctrine has no application in a case where the impugned order has been made in violation of the principles of natural justice (See The State of Uttar Pradesh vs Mohammad Nooh(3).
It is manifest in the present case that the appellant had alleged in the writ petition that the Taxing Officer had no authority to impose the tax and there was no validly constituted Antarim Zila Parishad after December 31, 1959.
It was further alleged that sections 114 and 124 of the U.P. District Boards Act No. X of 1922 violated article 14 of the Constitution as arbitrary power was granted to District Boards as well as the State Government to exempt any person or class of persons or any property or class of properties from the scope of the Act.
There is also an allegation that the imposition of the tax violated the provisions of article 276 of the Constitution and that the Antarim Zila Parishad could not impose the tax beyond the maximum limit of Rs. 250/per annum prescribed in that Article.
It was further contended on behalf of the appellant that the procedure for assessment of the tax was not followed and there was violation of the principles of natural justice.
In view of the allegations of the appellant that the taxing provisions are ultra vires and that there was violation of the principles of natural justice, we think that the High Court was in error in summarily dismissing the writ petition on the ground that the appellant had an alternative remedy of statutory.
appeal.
It was contended by Mr. Chagla on behalf of the respondent that in dismissing the writ petition the High Court was acting in its discretion.
But it is manifest in the present case that (1) ; (2) (3) [1958] s.c.R,.
524 the discretion of the High Court has not been exercised in accordance with law and the judgments of the Division Bench dated March 27, 1964 and of the learned Single Judge dated February 13, 1964 summarily dismissing the writ petition are defective in law.
For the reasons expressed we hold that this appeal must be allowed, the judgments of the Division Bench in Special Appeal No. 322 of 1964 dated March 27, 1964 and of the learned Single Judge dated February 13, 1964 should be set aside and Civil Miscellaneous Writ No. 2371 of 1962 should be restored to file and dealt with in accordance with law.
There will be no order with regard to the costs of this appeal in this Court.
G.C. Appeal allowed. | The appellant was a partnership firm carrying on the business of manufacturing Khandsari Sugar in the District of Muzaffarnagar, U.P.
Under section 114 of the U.P. District Boards Act X of 1922 a District Board had power to levy a tax on circumstances and property subject to certain conditions and restrictions.
The powers of District Boards, under the aforesaid Act were by virtue of the U.P. Antarim Zila Parishad Act, 1958 conferred on the Parishads formed under the latter Act.
The U.P. Antarim Zila Parishad Act 1958 expired on 31st December, 1959 but its life was extended to 31st December, 1960 by .Amending
Act No. 1 1960 which received the assent of the Governor on January 5, 1960.
When the taxing officer of the Antarim Zila Parishad Muzaffarnagar subjected the appellant to circumstances and property tax for 1959 60 the appellant filed a writ petition in the High Court contending inter alia that Amending Act No. 1 of 1960 could not continue the Act of 1958 because the latter had already expired on 31st December, 1959 while the former received the consent of the Governor on January 5, 1960.
The constitutionality of the taxing provisions was also challenged.
The writ petition was dismissed by the High Court on the sole ground that the remedy by way of appeal under section 128 of the District Boards Act 1922, had not been exhausted.
The U.P. Kshetra Samitis and Zila Parishads Adhiniyam of 1961 (U.P. Act 32 of 1961) was passed in November, 1961.
Acting under it the .taxing officer of the Zila Parishad subjected the appellant to circumstances and property tax for the year 1961 62 without giving any notice or inviting objections.
In respect of this assessment also the appellant filed a writ petition in the High Court pleading denial of natural justice as well as challenging the constitutionality of the taxing provisions.
This petition was also dismissed on the same ground as the earlier one.
The appellant came to this Court.
HELD: The rule of exhaustion of statutory remedies before a writ is granted is a rule of self imposed limitation, a rule of policy and discretion rather than a rule of law and the court may therefore in exceptional cases issue a writ such as a writ of certiorari notwithstanding the fact that the statutory remedies have not been exhausted.
[522 C] State of Uttar Pradesh vs Mohammad Nooh, [1958] S.C.R. 596, 605, relied on.
There are at least two well recognised exceptions to the doctrine with regard to the exhaustion Of statutory remedies.
In the first place it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the High Court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent.
without his being obliged to wait until those proceedings run their full course.
[523 C] 519 Cart Still G.M.B.H.v.
State of Bihar, A.I.R. 1961 S.C. 1615 and The Bengal Immunity Co. Ltd. vs State of Bihar, , relied on.
In the second place the doctrine has no application in a case where the impugned order has been made in violation of the principle of natural justice.
[523 D] State of Uttar Pradesh vs Mohammad Nooh, [1958] S.C.R. 596, 605, referred to.
In the present case in view of the allegations of the appellant that the .taxing provisions were ultra vires and that there was a violation of the principles of natural justice the High Court was in error in summarily dismissing the writ petition on the ground that the appellant had an alternative remedy of statutory appeal.
The High Court was no doubt vested with a discretion but in the present case the discretion had not been exercised in accordance with law.
[523 C 524 A] |
Appeal No. 958 of 1966.
Appeal by special leave from the Award dated September 16, 1965 of the Labour Court, Allahabad in Adjudication Case No. 78 of 1965.
G.R. Gokhale, O.P. Malhotra and 1.
B. Dadachanji, for the appellant.
R. Vasudev Pillai and Subodh Markandeya, for respondents Nos.
2(a) to 2(k).
541 The Judgment of the Court was delivered by Vaidialingam, J.
In this appeal, by special leave, the question, that arises for consideration, is as to whether the award of the Labour Court, Allahabad, dated September 16, 1965, directing the reinstatement of six workmen, referred to in the order of reference, is justified.
The facts leading up to the award may be referred to.
There was a strike, in the establishment of the appellant company, from March 18, 1964.
There was a meeting, of the District Industrial Relations Advisory Committee, on March 29, 1964, presided over by the District Magistrate of the area.
Representatives of the management and the workmen, attended the said meeting.
The proceedings of the meeting show that the Advisory Committee, decided to appeal to the appellant not to take any action, against the workers, on the gro.und that they had on strike, from March 18 1964.
There was an appeal, to the District Magistrate, Allahabad, to release, as a gesture of goodwill, the arrested employees of the company, who were not involved in violence.
The Union, representing the workers of the appellant, in turn, decided to call off the strike and directed the workmen to resume work with effect from the morning of March 30, 1964.
There is no controversy that the strike was called off, and certain workers, who had been arrested in connection with the strike, were also released from ia 'il, on March 29, 1964 itself.
This strike will be referred to, as the first strike, in the course of this judgment.
On March 20, 1964, the respondent Union had given to the appellant, another notice, stating that the workmen of the appellant company would be going on a token strike, for one day, after fourteen days of the receipt of the notice, in sympathy with the workers of the Swadeshi Cotton Mills, Nalni.
The exact date, on which the strike was to take place, was not given in the notice, as required under sub section
(4) of section 6S of the U.P. (hereinafter referred to as the Act).
On April 9, 1964, the respondent Union again intimated to the management about the workmen 's intention to go on strike on April 10, 1964, and offered to work on a Sunday, so that there would be no loss of production; but the management intimated the Union that the factory would work on April 10, 1964.
A token strike actually took place, on April 10, 1964.
This strike will be termed as the second strike, in these proceedings.
In respect of the first strike, the Management had, on March 28, 1964, charge sheeted, for going on an illegal strike, some of the workmen, including the workmen, whose dismissal had been set aside by the present award.
A joint reply was sent, by the concerned workmen, on April 9, 1964, to the management, drawing their attention to the decision of the District Industrial Rela 545 tions Advisory Committee, dated March 29, 1964, and the settlement, arrived at, therein, between the management and the Union.
The workmen also requested the management, not 'to disobey the decision of the Committee.
The appellant sent a communication, on April 10, 1964, to the workmen, stating that they had not made any commitment, at the meeting on March 29, 1964, that the management would not proceed with the taking of disciplinarY action, against an employee, who committed a mis conduct, according to the Standing.
Orders of the Company.
The work men were again directed to furnish, within 24 hours, their reply, if any, to the charge sheet, dated March 28, 1964.
On May 8, 1964, the Acting Works Manager, of the appellant company, passed orders, warning the concerned workmen, for having mis conducted themselves, as s 'tated in the chargesheet, dated March 28, 1964.
It is further stated, in this order, that, after hearing the explanation, furnished by the workmen, the management holds the workmen guilty of mis conduct, for which they could have been dismissed; but the management has taken a lenient view and, hoping that the mis conduct will not be repeated, administers an earnest warning.
In respect of the second strike, which took place on April 10,1964, the management charge sheeted, on April 16, 1964, thirteen wo.rkmen, for going on illegal strike which is a mis conduct, under sub cl.
(2) of el. 21, of the Certified Standing Orders of the company, and as the strike was in violation of sub section
(4) of section 6 S of the Act.
There was a further charge that the workmen, concerned, had intimidated and prevented other willing workers, from going to work.
The workmen were directed to offer their explanation, as to why disciplinary action need not be taken for their conduct.
On April 17, 1964, the thirteen workmen, jointly sent a reply saying that the strike, on April 10, 1964, was legal, and due notice had been given, under the provisions of the Act.
They also denied having intimidated, or restrained, any willing worker from going to work.
They further stated that they had not committed any mis conduct.
The management proceeded to conduct an inquiry, against the thirteen workmen, and Sri K. 'D. Gupta, an officer of the company, was entrusted with the conduct of the said inquirY. Shri Gupta accordingly conducted an enquirY on April 20, 1964, and sent his report to the Acting Works Manager, .on
April 24, 1964.
After referring to the conduct of the inquiry proceedings, Shri Gupta has stated that the thirteen workmen are ' guilty of participation in an illegal strike, on April 10, 1964, and, as participation in an illegal strike, is a mis conduct under el.
21 (2 ) of the Certfied Standing Orders of the Company, the workmen, concerned, are guilty.
of mis conduct, but, regarding the 546 charge of intimidation and incitement, the inquiry officer found that the said charge was not established.
On May 22, 1964, the Acting Works Manager of the appellant accepted the report of Shri Gupta and passed orders, administering a warning, to seven, out of the thirteen, workmen, but, regarding the remaining six workmen, the Works Manager, after taking into account the warning that had been administered to them, on May 8, 1964, for go.ing on an illegal strike (referring to the first strike), passed orders dismissing them from service.
The Union raised a dispute, regarding the dismissal of the six workmen and, accordingly, the said dispute was referred to the Labour Court, Allahabad, for adjudication.
The case of the workmen was that the strike, on April 10, 1964, was legal, and that the domestic inquiry, conducted by Shri Gupta, was neither bona fide, not fair.
They also contended that in view of the settlement, arrived at on March 29, 1964, in respect of the first strike, the management had no right to take any action, by way of warning the workmen, as it purported to do, on May 8, 1964.
Taking the said warning into account, for the purpose of imposing the punishment of dismissal, amounted to a vindictive conduct, on the part of the management and, therefore, the order of dismissal was illegal.
The management, on the other hand, contended that the strike, that took place on April 10, 1964, was illegal, as it was not in accordance with the provisions of the Act and participation, in such illegal strike, was a mis conduct, under el.
21 (2) of the Standing Orders of the Company and, such mis conduct could be punished by dismissal, under cl. 22.
According to the management, the inquiry proceedings, conducted by Shri Gupta, were quite fair, and bona fide, and the workmen were given full opportunity to participate in the inquiry proceedings.
They also pleaded that the management was entitled, to impose punishment for mis conduct, by taking into account the previous conduct of the worlcmen, concerned; and, in this case, the warning, recorded against them on May 8, 1964, was legitimately and properly taken into account, inasmuch as the management had not agreed to withdraw the proceedings, against the workmen.
The Labour Court has upheld the plea of the management, that the second strike, on April 10, 1964, being contrary to sub section (4) of section 6 S, was illegal under section 6 T of the Act; but it has further held that, notwithstanding the infirmity in the notice, issued by the workmen regarding the second strike, all the managements in the area, including the appellant, were fully aware of the fact of the intended token strike on April 10, 1964.
The Labour Court has further held that the inquiry proceedings, conducted by Shri Gupta, were bona fide and fair, and they suffered from No. infirmity, 547 whatsoever.
The Labour Court further holds that, though normally imposing of a punishment, for mis conduct, under the Standing Orders, is a managerial function, in this case, the appellant was not justified in taking into account the warning, recorded on May 8, 1964, in respect of the first strike.
It is the further view, of the Labour Court, that the continuance of disciplinary proceedings, and recording of warnings, on May 8, 1964, by the appellant, against the six concerned workmen, in respect of the first strike, was with a view to create a ground for punishment and dismissal, in the subsequent proceedings, relating to the second strike, and, as such, the action of the management was not bona fide.
The Labour Court, in this connection, refers to the proceedings of the District Industrial Relations Advisory Committee, that took place on March 29, 1964, in the presence of the representatives of the appellant, and the Union, and the Labour Court is of the view that a settlement had been arrived at, by which the management has agreed, not to take any disciplinary action, against the workers, in connection with the first strike: Ultimately, the Labour Court holds that the punishment of dismissal, inflicted on the six workmen, by the appellant, on May 22, 1964, is unconscionable and unjustified, and not recorded in a bona fide manner.
In consequence, the order of dismissal, passed against the six concerned workmen, named in the annexure to the order of reference, was set aside and the workmen were directed to be reinstated, with 50% back wages.
We have fairly elaborately referred to the various circumstances, leading to the passing of the order of dismissal, bY the management, in order to appreciate the contentions, urged on behalf of the management, that the Labour Court had committed a serious illegality, in interfering with an order, passed by the management, for mis conduct, as provided under the standing orders of the company.
Mr. H.R. Gokhale, learned counsel, for the appellant, raised two contentions before us:.(1)that 'the finding of the Labour Court, that at the meeting of the District Industrial Relations Committee, held on March 29, 1964, the appellant agreed not to take disciplinary action, against its ' workmen, in respect of the first strike, is erroneous; and (ii) that having held that the second strike was illegal as being contrary to sub section
(4) of section 6 S of the Act, the Labour Court has committed an error in interfering with the act of the management, when it imposed a punishment, for mis conduct, under the standing orders of the company.
Mr. R. Vasudeva Pillai, learned counsel for the Union, has supported, in full, the award of the Labour Court.
We are not impressed with either of the contentions, of the learned counsel for the appellant.
We have already referred to LI3Sup.
CI/68 4 548 the proceedings, of the District Industrial Relations Committee, March 29, 1964.
No doubt, a day prior to that, the appellant had issued notices to the workmen, asking them to show cause as to why disciplinary action should not be taken against them, for going on strike from March 18, 1964.
There was a joint reply given by the workmen, on April 9, 1964, to the effect that, at the meeting held on March 29, 1964, the managem.ent had agreed, not to take any disciplinary action, against the workmen, and that, it was on that 'basis that the strike itself was called off, and the workmen, arrested, were also released by the Government.
There was no doubt an attempt, by the management, in their reply of April 10, 1964, to make it appear that they had not committed themselves, at the meeting of March 29, 1964, as mentioned by the workmen.
But it is rather surprising that, when the President of the Union, WWI, gave evidence to the effect that there was a settlement, on March 29, 1964, whereby the management had agreed not to take any disciplinary action, against the workmen, there was absolutely no cross examination, by the appellant, of that witness.
There is no dispute that Mr. Wright represented the management, at the said meeting, and no suggestion even has been made to WWI that the evidence, given by him, is not correct.
No doubt, the appellant, in their letter of April 10, 1964, had taken the stand that the company had not committed itself, not to take any action against the workmen, in respect.
of the first strike.
The inquiry report of Shri Gupta, in respect of the second strike, was already in the hands of the management, on April 24, 1964.
It is really after the receipt 'of this report, that the Acting Works Manager of the appellant company recorded warnings, as against the concerned workmen, on May 8, 1964,I in res 'peet of the first strike.
This warning has been taken into account, by the Works Manager, when he passed the order of dismissal, in respect of the Second strike, on May 23, 1964.
Having due regard to these circumstances, the finding of the Labour Court, that the continuance of the disciplinary proceedings, and recording of punishments of warnings, as against the six concerned workmen, on May 8, 1964, in respect of the fixst strike, by the management was to create a ground for punishment and dismissal, in respect of the second strike, is perfectly justified.
The further finding of the Labour Court, that 'the action of the management, in recording warnings in respect of the first strike, is not only not bona fide, but also against the settlement, 'arrived at, on March 29, 1964, is.
also correct.
The first contention, on behalf of the management, therefore fails.
There is the finding of the Labour Court, that the second strike, on April 10, 1964 is illegal.
Going on illegal strike, is certainly 'mis conduct ' under sub el.
(2) of el. 21, of the Standing Orders of the company.
Under el.
22 of the Standing Orders, the 549 punishment for mis conduct is dismissal, or, in the alternative, suspension, for a period not exceeding four days.
If the management had, without any regard to what happened, in respect of the first strike, imposed punishment under cl. 22, in respect of an illegal strike, which is 'mis conduct ' under cl. 21 (2)of the Standing Orders, after a fair inquiry, the punishment, meted out being a managerial function, would not be normally interfered with.
But in this case, even the order of dismissal clearly shows that the management has taken into account the previous conduct of the workmen, in having gone on the first strike, and the punishment of warning, administered on May 8, 1964.
It is because of this past conduct, it is further stated in the order, that the six workmen were being dismissed from service.
The finding of the Labour Court is that the management was not entitled to take into account the warning, given on May 8, 1964, in respect of the first strike, in view of the settlement, on March 29, 1964.
In view of the fact that the warning has been taken into account, by the management, which it is not entitled to, the punishment of dismissal has been rightly considered, by the Labour Court, to be not bona fide, and vindictive.
In fact, the Labour Court is also of the view that the punishment is unconscionable, and unjustified.
It is on these grounds, that the Labour Court has interfered with the order of dismissal, passed by the management.
The second co.ntention, of learned counsel for the appellant, also fails, as we are in agreement with the reasons, given by the Labour Court, 'on this aspect of the matter.
The result is that this appeal fails, and is dismissed.
There will be no order as to costs.
G.C. Appeal dismissed. | There was a strike in the establishment of the appellant company betseen 18th and 30th March, 1964, and again a token strike on 10th April, 1964.
For the misconduct of going on the first strike some of the workmen were charged and given a warning.
The second strike was held to be illegal by an enquiry officer and six of the workmen who had been given a warning in respect of the first strike were dismissed for taking part in the second strike also.
The Labour Court held that in the compromise that had ended the first strike the company had given the undertaking that it would not take any action by way of punishment against the workmen, and therefore the warning in respect of the first strike which was given only after the enquiry report relating to the second strike had been already received, was not only not bona fide but illegal.
Because this warning was taken into account against the six workmen who were dismissed, the Labour Court set aside the order of dismissal, although holding that the second strike was ille.gal because of want of notice under subs.
4 of section 6 S of the U.P.
The company appealed to this Court.
HELD: (i) The Labour Court rightly held on the facts that the warning given to the workmen in respect of the.
first strike was not only not bona fide but also.
against the terms of the settlement by which the first strike was ended.
[548 G] (ii) The second strike was, as held by the Labour Court, illegal and therefore 'misconduct ' under sub cl.
(2) of cl. 21 of the Standing Orders of the company.
Any punishment imposed under el.
22 of the said Orders in respect of an illegal strike after a fair enquiry, being a managerial function would not normally be interfered with.
But in the present case the management was not entitled to take into.
account the warning given in respect of the first strike in view of the settlement it had entered into with the workers to end that strike.
The Labour Court was therefore again right in holding the punishment of dismissal of the six respondents as vindictive and unjustified.
[548 H 549E] |
Appeal No. 1109 of 1965.
Appeal from the judgment and decree dated December 3, 1962 of the Patna High Court in Appeal from Original Decree No. 300 of 1959.
section Mitra and R.C. Prasad, for the appellant.
621 K.K. Sinha, for respondent No. 2.
The Judgment of the Court was delivered by Bachawat, J.
The plaintiff Bank lent moneys to defendant No. 1 Damodar Prasad on the guarantee of defendant No. 2 Paras Nath Sinha.
On the date of the suit Damodar Prasad was indebted to the plaintiff for Rs. 11,723.56 nP on account of principal and Rs. 2,769.37 nP on account of interest.
In spite of demands neither he nor the guarantor paid the dues.
The plaintiff filed a suit against them in the Court of the Subordinate Judge, 1st Court, Patna, claiming a decree for the amount due.
The Trial Court decreed the suit against both the defendants.
While passing the decree, the Trial Court directed that the "plaintiff bank shall be at liberty to enforce its dues in question against defendant No. 2 only after having exhausted its remedies against defendant No. 1".
The plaintiff filed an appeal challenging the legality and propriety of this direction.
The High Court dismissed the appeal.
The plaintiff has filed the present appeal after obtaining a certificate.
The guarantee bond in favour of the plaintiff bank is dated June 15, 1951.
The surety agreed to pay and satisfy the liabilities of the principal debtor upo Rs. 12,000/ and interest thereon two days after demand.
The bond provided that the plaintiff would be at liberty to enforce and to recover upon the guarantee notwithstanding any other guarantee security or remedy which the Bank might hold or be entitled to in respect of the amount secured.
The demand for payment of the liability of the principal debtor was the only condition for the enforcement of the bond.
That condition was fulfilled.
Neither the principal debtor nor the surety discharged the admitted liability of the principal debtor in spite of demands.
Under sec.
128 of the Indian Contract Act, save as provided in the contract, the liability of the surety is coextensive with that of the principal debtor.
The surety became thus liable to pay the entire amount.
His liability was immediate.
It was not deferred until the creditor exhausted his remedies against the principal debtor.
Before payment the surety has no right to dictate terms to the creditor and ask him to pursue his remedies against the principal in the first instance.
As Lord Eldon observed in Wright V. Simpson(1). "But the surety is a guarantee; and it is his business to see whether the principal pays, and not that of the creditor.
" In the absence of some special equity the surety has no fight to restrain an action against him by the creditor on the ground that the principal is solvent or that the creditor may have relief against the principal in some other proceedings.
(1) ; 734: ; , 1282.
622 Likewise where the creditor has obtained a decree against the surety and the principal, the surety has no right to restrain execution against him until the creditor has exhausted his remedies against the principal.
In Lachhman Joharirmal V. Bapu Khandu and Surety Tukaram Khandoji(1) the judge of the Court of Small Causes, Ahmedabad, solicited the opinion of the 13Bombay High Court on the subject of the liability of sureties.
The creditors having obtained decrees in two suits in the Court of Small Causes against the principals and sureties presented applications for the, imprisonment of the sureties before levying execution against the principals.
The judge stated that the practice of his court had been to restrain a judgment creditor from recovering from a surety until he had exhausted his remedy against the principal but in his view the surety should be liable to imprisonment while the principal was at large.
Couch, C.J. and Melvell, J. agreed with this opinion and observed : "The court is of opinion that a creditor is not bound to exhaust his remedy against the principal debtor before suing the surety and that when a decree is obtained against a surety, it may be enforced in the same manner as a decree for any other debt.
" It is now suggested that under Order XX r. 11 (1 ) and sec.
151 of the Code of Civil Procedure the Court passing the decree had the power to impose the condition that the judgment creditor would not be at liberty to enforce the decree against 'the surety.
until the creditor has exhausted his remedies against the principal.
Order XX r. 11 ( 1 ) provides that "where and in so far as a decree is for the payment of money, the Court may for any sufficient reason at the time of passing the decree order that payment of the amount decreed shall be postponed or shall be made by instalments, with or without 'interest, notwithstanding anything contained in the contract under which the money is payable.
" For making an order under O. XX r. 11 (1 ) the Court must give sufficient reasons.
The direction postponing payment of the amount decreed must be clear and specific.
The injunction upon the creditor not to proceed against the surety until the creditor has exhausted his remedies against the principal is of the vaguest character.
It is not stated how and when the creditor would exhaust his remedies against the principal.
Is the creditor to ask for imprisonment of the principal ? Is he bound to discover at his peril all the properties of the principal and sell them; and if he cannot, does he lose his remedy against the surety ? Has he to file an insolvency petition against the principal ? The Trial Court gave no reasons for this extraordinary direction.
The Court rejected the prayer of the principal debtor for payment of the decretal amount in instalments as there was no evidence to show (1) (1869) 4 Bom.
High Court Reports.
623 that he could not pay the decretal amount in one lump sum.
It is therefore said that the principal was solvent.
But the solvency of the principal is not a sufficient ground for restraining execution of the decree against the surety.
It is the duty of the surety to pay the decretal amount.
On such payment he will be subrogated to the rights of the creditor under sec.
140 of the Indian Contract Act.
and he may then recover the amount from the principal.
The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the surety.
In the present case the creditor is a banking company.
A guarantee is a collateral security usually taken by a banker.
The security will become useless if his rights against the surety can be so easily cut down.
The impugned direction cannot be justified under O. XX r. 11 (1).
Assuming that apart from O. XX r. 11 ( 1 ) the Court had the inherent power under section 151 to direct postponement of execution of the decree, the ends of justice did not require such postponement.
In the result, the appeal is allowed, the direction of the court below that the "plaintiff bank shall be at liberty to enforce its dues in question against defendant No. 2 only after having exhausted its remedies against defendant No. 1" is set aside.
The respondent Dr. Paras Nath Sinha shall pay to the appellant costs in this Court and in the High Court.
Y.P. Appeal allowed. | The appellant creditor lent moneys to the first respondent on the guarantee of the second respondent.
, The appellant filed a suit against the respondents for recovery of the amount due.
and the suit was decreed.
While passing the decree, the Trial Court directed that the appellant would not be at liberty to enforce the decree against the second respondent ' until he had exhausted his remedies against the first respondent.
The appellant challenged this direction.
The High Court dismissed the appeal.
In appeal on certificate, this Court : HELD: The direction must be set aside.
In the absence of some special equity the surety has no right to restrain execution against him until the creditor has exhausted his remedies against the principal.
For making an order under O.XX r. 11 (1 ) of C.P.C. the court must give specific reasons.
The direction postponing payment of the amount decreed must be clear and specific.
The injunction upon the creditor not to proceed against the surety until the creditor has exhausted his remedies against the principal was of the vaguest character.
It was not stated how and when the creditor would exhaust his remedies against the principal.
[622 A, F G] It is the duty of the surety to pay the decretal amount.
On such payment he will be subrogated to the rights of the creditor under section 140 of the Indian Contract Act.
and he may then recover the amount from the principal.
The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the surety.
In the present case the creditor is banking company.
A guarantee is a collateral security usually taken by a banker.
The security will become useless if his rights against the surety can be so easily cut down.
The impugned direction cannot be justified under O.XX r. 11 (1).
Assuming that apart from O.XX r. 11(1) the Court had the inherent power under section 151 to direct postponement of the execution of the decree, the ends of justice did not require such postponement.
[623 A C] Lachhman ,Joharimal V. Bapu Khandu and Surety Tukaram Khandoji, (1869) 4 Bom.
High Court Reports, 241. |
vil Appeal No. 683 of 1968.
Appeal under section 116 A of the Representation of the People Act, 1951 from the Judgment and order dated January 10, 1968 of the Judicial Commissioner of Manipur in Election Petition Case No. 2 of 1967.
D. Goburdhun, for the appellant.
K.R. Chaudhuri, K. Rajendra Chaudhuri and C.S. Sreenivasa Rao, for respondent No. 1.
The Judgment of the Court was delivered by Hidayatullah, C.J.
This is an appeal from the Court of the Judicial Commissioner for Manipur at Imphal under section 116A of the Representation of People Act.
The appeal arises 'from an election to the Outer Mareput Parliamentary Constituency at which the appellant, who was the returned candidate, and five others were the contesting candidates.
This Outer Mareput Constituency comprised 14 Assembly constituencies.
The dates of poll were 15th, 20th, 24th, 28th February, and 6th March, 1967 and the time of poll was from 7 30 A.M. to 4 30 P.M.
This constituency had 2,19,554 registered voters.
The total number of votes polled was 1,20,008.
Of these 4,166 votes were declared invalid.
The returned candidate received 30,403 votes as against the next candidate who received 28,862 votes.
There was thus a majority of 1,541 votes in favour of the returned candidate.
The result of the poll was declared on March 10, 1967.
The candidate who secured the second largest number of votes filed this election petition on April 20, 1967.
The main ground of attack, which succeeded in the Judicial Commissioner 's Court, was that the poll was disturbed because of numerous circumstances.
These were that the polling centres were in some cases changed from the original buildings to other buildings of which due notification was not issued earlier with the result that many of the ' voters who went to vote at the old polling booths found no arrangement for poll and rather than go to the new polling station, went away without casting their votes. 'The second ground was that owing to firing by the Naga Hostiles, the voting at some of the polling stations was disturbed and almost no votes were cast.
It was lasfly contended that the polling hours at some stations were reduced with the result that some of the voters who went to the polling station were unable to cast their votes.
639 It is hardly necessary to set down here the names of the polling stations at which these things happened.
In any event, these pelting stations carry rather strange names and it would not help to state them here.
The net result may be stated.
It was this there were 12 polling centres, at 4 of which the venue for the poll was altered.
There were 6 others at which the firing disturbed the poll and In 2 of the polling.
centres not a single vote was cast and lastly in one of the polling centres out of 513 voters only one voted.
The following chart discloses the break up of the figures at these polling centres: SR.
No. of No. of No. Name of the polling stations voters votes (as notified) attached actually to the cast station 1.Tungam Khullen High School . . 1,242 522 2.ChandelJunior Basic School . . 1,060 172 3.
Purum Pantha L.P. School . . 654 338 4.
Litan L.P. School . . 449 347 5.
Toupokpi M.E. School . 584 128 6.Chakpikarong M.E School. . 715 67 7.Bolyang Tampak L.P. School. . . 868 249 8.Oklu L.P.School . . . . 725 17 9.Lorong Khullen J.B.School. . 581 53 10.Lakhmei M.E.School. . . 665 11.Nagri Khullen M.E.School . . 564 12.Karong Dak Bumgalow. . . 513 1 It will be noticed from this chart that out of 8,620 votes which could have been polled, only 1,894 votes were actually received.
In other words, 6,726 voters did not vote or could not vote.
The election petitioner who ran a deficit of 1,541 votes claimed in the election petition that the result of the poll was prejudicial to him in particular and friar by the non compliance with the provisions of the Act and its rules, the result of the election in so, far as the returned candidate was concerned had been materially affected.
The Judicial Commissioner after examining a large number of witnesses on both sides, came to the conclusion that there was this flaw in the election for this constituency.
He went further and held that the result of the election in so far as it concerned the returned candidate had been materially affected.
He, therefore, avoided the election and ordered fresh poll in the 12 polling stations.
In this appeal, the returned candidate attempted to establish that polling was not so disorganised that it could be said that 340 it did not take place.
He attempted to show that even where the polling station was shifted, it was a matter of few hundred yards and the people went to vote knew the new location of the polling booths.
He also submitted that, in any event, this had, affected all the contesting candidates equally and the election.
petitioner could not, therefore, be said to have suffered more ' than the other candidates.
Lastly, the returned candidate contended that it had not been established in accordance with the ruling of this Court in Vashist ,Narain Sharma vs Dev Chandra and others(1) that the result of the election had been materially affected so far as his election was concerned.
In this connection, the returned candidate relies upon the majority which he had already obtained and refers to the votes which had not been cast, pointing out that on the general pattern of the voting as disclosed in the case it cannot possibly be said that the election petitioner would have carried such a majority from those votes as to neutralise the successful lead he had already established.
The election petitioner as the answering respondent tried to establish that the pattern of the voting clearly showed that the returned candidate had obtained a fortuitous lead which was capable of being wiped off if the voting had proceeded according to the Act and the Rules.
Both sides relied upon statistics to establish their cases.
The election petitioner in addition relied upon the evidence of witnesses which he pointed out had been accepted by the Juclicial Commissioner and upon the observations of this Court contended that we should not lightly depart from the findings given by the learned Judicial Commissioner.
This case without entering into the numerous details, is confined to the above contentions of the rival parties.
To begin with, it is hardly necessary for us to go over the evidence with a view to ascertaining whether there had been or not a breach of the Act and the rules in the conduct of the election at this constituency.
We may say at once that having read the evidence we are in entire agreement with the decision of the learned Judicial Commissioner that by the change of venue and owing to the firing, a number of voters probably failed to record their votes which they would have gone if the poll had gone on smoothly and according to rules.
This shows that the matter is governed by section 100(1) (d) (iv).
The question remains still whether the condition precedent to the avoidance of the election of the returned candidate which requires proof from the election petitioner 'that the result of the election had been materially affected in so far as the returned candidate was concerned, has been established in the present case.
This part of the case depends upon the ruling of this Court in (1) [1955] 1 section
C.R. 509.
641 Vashist Narain Sharmas case(1).
In that case there was a difference of 111 votes between the returned candidate and the candidate who had obtained the next higher number of votes.
One candidate, by name Dudh Nath Singh, was found not competent to stand and the question arose whether the votes wasted on Dudh Nath Singh, if they had been polled in favour of the remaining candidates, would have materially affected the fate of the election.
Certain principles were stated as to how the probable effect upon the election of the successful candidate of votes which were.
wasted (in this case not cast) must be worked out.
Two witnesses were brought to depose that if Dudh Nath Singh had not, been a candidate for whom no voting had to be done, the voters would have voted for the next successful candidate.
Ghulam Hasan, J. did not accept this kind of evidence.
It is observed as follows: "It is impossible to accept the ipse dixit of witnesses coming from one side or the other to say that all or some of the votes would have gone to one or the other on some supposed or imaginary ground.
The question is one of fact and has to be proved by positive evidence.
If the petitioner.
is unable to adduce evidence in a case such as the present, the only inescapable conclusion to which the Tribunal can come is that the burden is not discharged and that the election must stand.
" In another passage, it is observed: "It will not do merely to say that all or a majority of the wasted votes might have gone to the next highest candidate.
The casting of votes at an election depends upon a variety of factors and ' it is not possible for any one to predicate how many or which proportion of the votes will go to one or the other of the candidates.
While it must be recognised that the petitioner in such a case is confronted with a difficult situation, it is not possible to relieve him of the duty imposed upon him by section 100(1)(c) and hold without evidence that the.
duty has been discharged.
" Further it is pointed out that the burden of proof in England the exact reverse of that laid down by the Indian statutes.
There, the returned candidate has to prove that the non compliance or mistake does not affect the result of the election.
In our country, the burden is upon the election petitioner to 'show affirmatively that the result of the 'election has been materially ' affected.
(1) ; 642 Therefore, what we have to see is whether this burden has been successfully discharged by the election petitioner by demonstrating to the court either positively or even reasonably that the.
poll would have gone against the returned candidate if the breach the rules had not occurred and proper poll had taken place at ' all the polling stations including those at which it did not.
The evidence in tiffs case which led by the election petitioner is the kind of evidence which was criticised by this Court.
Witnesses have stated that a number of voters did not vote because of the change of venue or because of firing and that they had decided to vote en bloc for the election petitioner.
This kind of evidence is merely an assertion on the part of each witness, and he cannot speak for 500 voters for the simple reason that as this Court said the casting of votes at an election depends upon a variety of factors and it is not possible for anyone to predicate how many or which proportion of votes will go to one or the other of the candidates.
We cannot therefore accept the statement even of a Headman that the whole village would have voted in favour of one candidate to the exclusion of the others.
This conclusion is further fortified if one examines the polling pattern in this election.
To begin with, it is wrong for the election petitioner to contend that of the 6,726 votes which were not cast, he would have received all of them.
The general pattern of poll not only in this constituency but in the whole of India is that a11 the voters do not always go to the polls.
In fact, in this case, out of 2,19,554 voters, only 1,20,008 cast their votes.
Even if we were to add to them the 6,726 votes, it is obvious that not more than 5 5 % of the voters would have gone to the polls.
This immediately cuts down the figure of 6,726 to a little over half and the margin from which the election petitioner could claim additional votes therefore.
becomes exceedingly small.
When we turn to the pattern of voting, as is disclosed at the various polling booths at which the voters had in fact gone, we get reasonably clear picture.
At 9 polling centers, 1893 votes were actually polled.
Of these, 524 votes were received by the election petitioner and 413 by the returned candidate and 1,097 votes went to the other candidates.
In other words, out of 20 votes, 11 went to other candidates, 5 to the election petitioner and 4 to the returned candidate.
If one goes by the law of averages and applies these figures reasonably to half of the votes which were not cast, it is demonstrated at once that the election petitioner could not expect to wipe off the large arrears under which he labored and that he could not have therefore made a successful bid for the seat even with the assistance of the voters who did not cast their votes.
It is pointed out that at Tungam Khullen High 643 School, he received 401 out of 522 votes.
If this had been the general pattern, one could say that he would have got almost the votes that had not been cast.
But look at the other polling stations.
At Litan L.P. School, he obtained 41 out of 347, at Chandel Junior Basic School he got 34 out of 172, at Purum Pantha L.P. School he got 11 out of 338, at Toupokpi M.E. School 18 out of 128, at Oklu L.P. School 8 out o.f 17, at Chakpi Karong M.E. School 2 out of 67, at Larong Khullen L.P. School 1 out of 53 and at Bolyang Tampak L.P. School 8 out of 249.
While we do not think that statistics can be called in aid to prove such facts, because it is notorious that statistics can prove anything and made to lie for either case, it is open to us in reaching our conclusion to pay attention to the demonstrated pattern of voting.
Having done so, we are quite satisfied that 1,541 votes could not, by any reasonable guess, have been taken off from the lead of the returned candidate so as to make the election petitioner successful.
In so far as the other contesting candidates are concerned, they had received so few votes that even if they had received all the votes that had not been cast, it would not have mattered little to the result of the election.
The learned Judicial Commissioner reached his conclusion by conrefitting the same error which was criticised in Vashist Narain Sharing 's(1)) case.
He took the statement of the witnesses at their word and held on the basis of those statements that all the votes that had not been cast would have gone to the election petitioner.
For this, there is no foundation in fact; it is a surmise and it is anybody 's guess as to how these people, who did not vote, would have actually voted.
In our opinion, the decision of the learned Judicial Commissioner that the election was to contravention of the Act and the Rules was correct in the circumstances of this case; but that does not alter the position with regard to section 100( 1 )(d)(iv) of the Act.
That section requires that the election petitioner must go a little further and prove that the result of the election had been materially affected.
How he has to prove it has already been stated by this Court and applying that test, we find that he has significantly failed in his attempt and therefore the election of the returned candidate could not be avoided.
It is no doubt true that the burden which is placed by law is very strict; even if it.
is strict it is for the courts to apply it.
It is for the Legislature to consider whether it should be altered.
If there is another way of determining the burden, the law should say it and not the courts.
It is only in given instances that, taking the law as it is, the courts can reach the conclusion whether the burden of proof has been successfully discharged by the election petitioner or not.
We are satisfied that in this case this burden has not been discharged.
The result is Sup.
Cl/69 10 644 that the appeal must succeed and it is allowed.
The election of the returned candidate will stand.
The costs in the Judicial Com.missioner 's Court will be as ordered.
The election petitioner who apparently was not so much at fault as the Government in changing the polling stations, shall bear only half the costs of the appellant in this Court.
Y.P. lippeal allowed. | In an election to a Parliamentary constituency, having 2,19,554 voters 1,20,008 votes were polled.
of these 4,168 votes were declared invalid.
The appellant won by securing 1,541 votes more than the next candidate the respondent.
The respondent filed an election petition on the ground that the polling was disturbed as the polling centres were in some cases changed without due notification, at some polling stations almost no votes were cast because of fi 'ring at rioters and at some polling stations the polling hours were reduced.
Only 1,894 votes were polled at these polling booths, in which the total number of voters attached were 8,620.
so 6,726 voters could not vote.
The Judicial Commissioner ordered fresh poll in these polling stations.
In appeal by the returned candidate, this Court.
HELD: The appeal must succeed.
The decision of the Judicial Commissioner that the election was in contravention of the Act and the Rules was correct in the circumstances this case but that did not alter the position with regard to section 100(1)(d) (iv) of the Representation of the People Act.
That section requires that the election petitioner must go a little further and prove that the result of the election had been materially affected.
And in this case this burden had not been discharged.
[643 F] The evidence in this case which had been brought by the election 'petitioner was the kind of evidence which was criticised by this Court.
Witnesses were brought forward to state that a number of voters did not vote because of the change of venue or because of firing and that they had already decided to vote en bloc for the election petitioner.
This kind of evidence was merely an assertion on the part of a witness, who could not speak 'for 500 voters for the simple reason that as this Court said the casting of votes at an election depends upon a variety of factors and it is not possible for anyone to predicate how many or which proportion of votes wilt go to one or the other candidates.
This conclusion is further forified if one examines the polling pattern in this election.
Not more than 55% of the voters cast their votes. !This immediately cut down the ' figure of 6,726 to a little over half and the margin from which the election petitioner could claim additional votes therefore becomes exceedingly small.
From the pattern of voting as was disclosed at the various polling booths to which the voters had gone, it was clear, that 1,541 votes could not.
by any reasonable guess, have been taken off from the lead of the returned candidates so as to make the election petitioner successful. 'In ,so far as the other contesting candidates were concerned, they had received so few votes that even if they had received all the votes that had not been cast, it would have mattered little to the result of the election.
The Judicial Commissioner reached his conclusion by committing the same error which was criticised in Vashist Narain Sharmas case.
He took the statement of witnesses at their word and held on the basis of 638 these statements that all the votes that had not been cast would have gone to the election petitioner.
[642 B 643 E] Vashist Narain Sharma V. Der Chandra and Ors. ; , followed. |
Appeal No. 157 of 1959.
Appeal from the judgment and decree dated January 5, 1956, of the Allahabad High Court in Special Appeal No. 205 of 1954 and Civil Appeal No. 158 of 1959.
Appeal by special leave from the judgment and order dated January 15, 1952, of the Labour Appellate Tribunal of India, Allahabad, in Appeal No. Cal.
47 of 1951.
M.C. Setalvad, Attorney General for India and G. C. Mathur, for the appellant.
M. R. Krishna Pillai, for respondent No. 5 (In C.A. No. 157/1959).
C. P. Lal, for the State of U. P. and Respondents Nos. 2 and 4 (In C. A. No. 157/59).
O. P. Verma, for respondent No. 5 (in C. A. No. 158/59).
December 12.
The Judgment of the Court was delivered by DAs GUPTA, J.
These two appeals raise the question of the maintainability of an application made by the Employers ' Association of Northern India, Kanpur on behalf of , the J. K. Cotton and Weaving Mills 187 Co., Ltd., a member of the Association in connection with the proposed termination of service of certain members of its Watch and Ward Staff.
But before we come to the consideration of this question it is necessary to indicate in brief the long and tortuous path this matter has traveled before coming to us.
The application of the Employers ' Association purported to be under clause 5(a) of the Government order dated March 10, 1948, as amended by a later order of May 15, 1948.
This order was issued by the Governor of the United Provinces in exercise of the powers conferred on him by cl.
(b), (c), (d) and (g) of section 3 and by section 8 of the U. P.
The application after stating that a number of thefts of Dhoties had taken place in the Mill further stated that it was obvious to the management of the J. K. Cotton Spinning and Weaving Mills Co., Ltd., that this state of affairs could not exist and continue if Watch and Ward staff were carrying out their duties vigilantly, correctly and honestly.
It stated further that the management having lost confidence in the honesty of the Watch and Ward Staff had decided to terminate the services of all the per.
sons of the Watch and Ward Staff and to recruit fresh men from the employment exchange and that in lieu of notice of termination of service the management would pay to these persons 12 days ' wages in accordance with Standing Order No. 17A. The prayer made in the application was that "the Board be pleased to record the award entitling the J. K. Cotton and Weaving Mills Co., Ltd., to terminate the services of all the members of the Watch and Ward Staff whose names appear in Annexure A".
During the pendency of the application before the Board the applicant withdrew its prayer as regards 5 of the workmen.
As regards the remaining workmen, after rejecting the preliminary objection raised on their behalf that the Board had no jurisdiction to entertain the application, the Board held that "it would not be in the interests of either party or in the interest of industry to allow the remaining 27 sepoys to continue in the employment of the Mills" and the Board 188 accordingly made the award permitting the appellants to terminate the services of these 27 sepoys after giving them compensation at the rates set out by it starting with 15 days full wages and compensation for those with one year of service with additional amount of compensation on a graduated scale for longer periods of service.
Against this order both the parties appealed to the Industrial Court.
That court agreed with Board 's conclusion on the question of jurisdiction but pointed out that the "procedure adopted by the employers association was defective inasmuch as the mills did not apply to the Regional Conciliation Officer to discharge the sepoys in question".
On merits the court held that the evidence justified the conclusion of the Board that the management had lost confidence in the members of the Watch and Ward Staff and that having regard to the Standing Orders their services should be terminated in accordance with the Standing Orders.
It accordingly directed in modification of the order made by the Board "that the services of the 27 sepoys in question be terminated in accordance with the Standing Orders and that they would not be paid extra compensation as directed by the Board.
" The workmen then appealed to the Labour Appellate Tribunal of India.
The appellate tribunal held relying on an earlier decision of its own in Kanpur Mill Mazdoor Union vs Employers ' Association of Northern India (1) that the application under cl.
5(a) of the Government Order was not maintainable.
Accordingly it allowed the appeal and set aside the award of the Board as well as the Industrial Court.
J.K. Cotton and Weaving Mills Co., Ltd., thereupon filed an application under article 226 of the Constitution to the High Court of Judicature at Allahabad praying for a writ in the nature of certiorari calling for the records of the case from the Labour Appellate Tribunal of India and quashing the order of the Tribunal which has been mentioned above.
Mr. Justice Chaturvedi, before whom this application came up for hearing held that the application under (1)(1952) 189 cl.
5(a) was maintainable and the Appellate Tribunal had erred in holding otherwise.
Being however, of opinion that there had been undue delay in making this application for a writ, he dismissed the petition on that ground.
In the Letters Patent appeal preferred by the company against this decision a preliminary objection was raised on behalf of the Union representing the workmen that the Allahabad High Court could not call for the records and quash the order of the Labour Appellate Tribunal of India as those records were in Calcutta and consequently beyond the reach of the Court.
The learned Judges who heard the appeal upheld this objection and dismissed the appeal.
They however issued a certificate under article 132(1)and article 133(1)(c) of the Constitution.
Thereafterthe company also obtained special leave from this court to appeal directly against the order of the Labour Appellate Tribunal of India.
These two appeals preferred one on the certificate granted by theHigh Court and the other on the strength of the special leave granted by this Court, have been heard together.
The main controversy, as already indicated, is on the question of the maintainability of the application under cl.
5(a) of the Government order.
This order issued by the Governor of the United Provinces in exercise of the powers conferred on him by the U. P. 'contains detailed provisions as regards the settlement of industrial disputes.
The first clause provides for the constitution of Conciliation Boards consisting of three members.
Clause 2 provides for the appointment of conciliation officers for specified areas.
Clause 5 contains the important provisions as to commencement of proceedings before the Boards.
It provides two ways of starting these proceedings: one mentioned in cl.(b) is by an order made in writing by the Provincial Government for enquiring into a matter in respect of which an industrial dispute has arisen or is likely to arise.
The other method is by means of an application by an employee or recognised association of employers or registered trade union of workers or where there is 190 no such registered trade union the representatives not more than five in number duly elected by a majority of the workmen in the industry.
Any of these may by an application in writing move the Board to inquire into an industrial dispute.
This provision is in cl.
5(a) which may be set out in full: "5(a).
Any employee or recognised association of employers or registered Trade Union of workmen or, where no registered trade union of workmen exists in any particular concern or industry, the representatives not more than five in number of the workmen in such concern or industry duly elected in this behalf by a majority of the workmen, in such concern or industry as the case may be, at a meeting held for the purpose, may by application in writing move the Board to enquire into any industrial dispute.
The application shall clearly state the industrial dispute or disputes which are to be the subject of such inquiry.
" Clause 10 provides for the constitution of industrial courts for specified areas.
Clause 12 provides for appeals to this Court against the awards made by the Board.
The other clauses up to clause 22 deal with the powers and procedure of the Board or the Industrial Court and with the duties of employers to permit certain meetings to be held.
Then comes cl. 23 which is in these words: "Save with the written permission of the Regional Conciliation Officer or the Additional Regional Conciliation Officer concerned, irrespective of the fact whether an inquiry is pending before a Regional Conciliation Board or the Provincial Concilia tion Board or an appeal is pending before the Industrial Court, no employer, his agent or manager, shall during the continuance of an inquiry or appeal, discharge or dismiss any workman.
" Section 24 provides that every order made or direction issued under the provisions of this Government order shall be final and conclusive.
Clause 26 provides for penalties for contravention or an attempt to contravene any of the provisions of the order.
A consideration of the scheme of this legislation 191 makes it clear that while two modes are provided in clauses 5(a) and 5(b) for the commencement of proceedings for settlement of industrial disputes generally, a special provision is made in clause 23 that if an enquiry is proceeding before a Regional Conciliation Board or the Provincial Conciliation Board or an appeal is pending before the Industrial Court, no workman shall be discharged except with the written permission of the Regional Conciliation Officer or the Additional Conciliation Officer concerned.
The consequence in cl. 26 is that if any workman is discharged or dismissed during the continuance of such enquiry or appeal without such permission the employer shall be liable to fine or to imprisonment not exceeding three years or both.
The heavy punishment provided for contravention of the order shows the importance attached by the legislating authority to the directions given by the Order.
In deciding whether an application under cl.
5(a) was maintainable in the facts of the present case two questions arise for consideration.
The first is whether an industrial dispute comes into existence as soon as an employer decides on the dismissal of some of the workmen and proposes to give effect to such decision.
One view is that it is only the party aggrieved by the proposed dismissal, in other words, the workmen, who by objecting to the same can raise the dispute and that the employer cannot by his own proposal to dismiss the workmen be heard to say that a dispute had come into existence even before the workmen had a chance to object to the dismissal.
The contrary view which has found favour with Mr. Justice Chaturvedi of the High Court is that even at the stage the employer proposes to dismiss his workmen it is a case of contemplated non employment which will come within the expression "industrial dispute".
The other question is whether the provisions of cl. 23 of the order bar an application under cl.
5(a) during the con tinuance of any enquiry before the Regional Conciliation Board or the Additional Conciliation Board or during the pendency of the appeal before the Industrial Court.
There is no dispute that on June 13, 192 1950 when the application under clause 5(a) was made an inquiry was in fact pending before a Conciliation Officer.
It appears that on July 9, 1949 the Governor of the United Provinces made an order directing the Labour Commissioner of the United Provinces or a Conciliation Officer nominated by him in this behalf to redstart the adjudication proceedings between the J. K. Cotton & Weaving Mills Co., and section N. Shukla, a dismissed employee of the concern.
The Adjudica tor was directed to conclude the adjudication and submit his award by August 15,1949.
The time was extended by subsequent orders first to November 15, 1949 and then to March 31, 1950, again to June 30, 1950 and thereafter to September 30, 1950.
It is true that at the time these orders extending time for submission of award were made the Governor had no authority to make these orders and these orders were invalid.
They were validated by the provisions of section 3 of the U.P. Act XXIII of 1953.
In view of this position of the law the learned Attorney General has not disputed that on June 13, 1950 when the application under cl. 5(a) was made an enquiry was actually pending before a Conciliation Officer.
Consequently, before the management could make any order discharging or dismissing any of its workmen it was required by cl. 23 to obtain permission for the same from the Regional Conciliation Officer.
The question is whether in spite of this provision in cl. 23 the employer could make and the Board entertain an application under cl.
5(a) on this question of proposed dismissal.
We propose to consider this question first and for that purpose assume that an industrial dispute comes into existence as soon as the employer decides to dismiss his workmen and proposes to do so and that ordinarily he can make an application in such a dispute to the Board under the provisions of cl. 5(a).
If such application is decided against the employer and no permission is given to make the proposed dismissal, no difficulty arises.
What however is the position if on such an application the Board makes an order granting the employer the requisite permission to 193 dismiss his workmen? Under cl. 24 this order unless modified in appeal will be final and conclusive and shall not be questioned by any party thereto.
So far as the workmen are concerned they will not be able to dispute the correctness of the order except in the mode provided in the Government order itself.
What however is the position of the employer if in pursuance of the order made on his application under cl.
5(a) he discharges or dismisses his workmen? By doing so he will have clearly contravened the provisions of cl. 23, and will become liable to the severe penalty provided in cl.
26 a, penalty which might even extend to imprisonment up to three years.
To remove this incongruity, says the learned Attorney General, apply the rule of harmonious construction and hold that cl.
23 of the order has no application when an order is made on an application under cl. 6(a).
On the assumption that under cl.
5(a) an employer can raise a dispute sought to be created by his own proposed order of dismissal of workmen there is clearly this disharmony as pointed out above between two provisions viz., cl. 5(a) and cl. 23; and undoubtedly we have to apply the rule of harmonious construction.
In applying the rule however we have to remember that to harmonise is not to destroy.
In the interpretation of statutes the court,% always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect.
These presumptions will have to be made in the case of rule making authority also.
On the construction suggested by the learned Attorney General it is obvious that by merely making an application under cl.
(5) on the allegation that a dispute has arisen about the proposed action to dismiss workmen the employer can in every case escape the requirements of cl. 23 and if for one reason or other every employer when proposing a dismissal prefers to proceed under cl.
5(a) instead of making an application under cl. 23, cl. 23 will be a dead letter.
A construction like this which defeats the intention of the rule making authority in cl. 23 must, if possible, be avoided.
25 194 It is hardly necessary to mention that this rule in cl. 23 was made with a definite purpose.
The provision here is very similar to section 33 of the before its amendment, though there are some differences.
It is easy to see however that the rule making authority in making this rule was anxious to prevent as far as possible the recrudescense of fresh disputes between employers and workmen when some dispute was already pending and that purpose will be directly defeated if a fresh dispute is allowed to be raised under cl.
5(a) in the very cases where cl. 23 in terms applies.
There will be complete harmony however if we hold instead that cl.
5(a) will apply in all other cases of proposed dismissal or discharge except where an inquiry is pending within the meaning of cl. 23.
We reach the same result by applying another well known rule of construction that general provisions yield to special provisions.
The learned Attorney General seemed to suggest that while this rule of construction is applicable to resolve the conflict between the general provision in one Act and the special provision in another Act, the rule cannot apply in resolving a con flict between general and special provisions in the same legislative instrument.
This suggestion does not find support in either principle or authority.
The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers and judges but springs from the common understanding of men and women that when the same person gives two directions one covering a large number of matters in general and another to only some of them his intention is that these latter directions should prevail as regards these while as regards all the rest the earlier direction should have effect.
In Pretty vs Solly (1) (quoted in Craies on Statute Law at p. 205, 5th Edition) Romilly, M.R. mentioned the rule thus:"The rule is, that whenever there is a particular enactment and a general enactment in the same statute and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment (1) ; , 610. 195 must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply".
The rule has been applied as between different provisions of the same statute in numerous cases some of which only need be mentioned: De Winton vs Brecon (1), Churchill vs Crease (2), United States vs Chase (3) and Carroll vs Greenwich Ins.
Applying this rule of construction that in cases of conflict between a specific provision and a general provision the specific provision prevails over the general provision and the general provision applies only to such cases which are not covered by the special provision, we must hold that cl.
5(a) has no application in a case where the special provisions of cl. 23 are applicable.
As in the present case an inquiry was in fact pending before a Conciliation Officer, cl. 23 applied in respect of any discharge or dismissal of a workman and the employer could not take advantage of cl.
5(a) of the Government Order and such an application could not in law be entertained by the Board.
In view of this conclusion it is unnecessary for us to consider the other question that was raised, viz., whether an industrial dispute within the meaning of cl.
5(a) comes into existence as soon as an employer decides on the dismissal of some of its workmen and proposes to give effect to such a decision.
On the above conclusions we hold that the Labour Appellate Tribunal of India rightly held that the application under cl. 5(a) filed on June 13, 1950 was not maintainable and rightly set aside the awards of the Conciliation Board and the Industrial Court.
The appeal against the order of the Labour Appellate Tribunal of India is therefore dismissed.
As we have already pointed out above the order made by the appellate Bench of the High Court in the writ petition was based on its acceptance of the preliminary objection that the records of the Labour Appellate Tribunal being in Calcutta could not be (1)(1858) (2)(1828) 5 Bing.
(3)(1890) ; (4)(1905) ; 196 reached by any writ of the Allahabad High Court.
In view of our conclusion that the application under cl.
5(a) was not maintainable, the appellant was on merits not entitled to any writ and on that ground the appeal against the High Court 's order must also be dismissed.
It is unnecessary to consider the question whether the High Court was right in its view as regards the preliminary objection and we express no opinion on the same.
Both the appeals are accordingly dismissed with costs to the contesting respondent.
There will be one set of hearing fee.
Appeals dismissed. | Under sections 3 and 8 of the U. P. the Governor issued an Order dated March 10, 1948, making dletailed provisions for the settlement of Industrial Disputes.
Clause 5(a) of the Government Order empowered, among others, a recognised association of employers to refer an industrial dispute for adjudication to the Conciliation Board.
Clause 23 provided that no employer shall discharge or dismiss any workman during the pendency of an inquiry except with the written permission of the Regional Conciliation Officer, and Cl. 26 provided for penalties for contravention of Cl. 23.
The appellant proposed to dismiss certain workmen.
Though at the time there was a dispute pending inquiry, the appellant did not seek permission under cl. 23 to dismiss the workmen; but the Employers ' Associa tion of Northern India made an application under cl.
5(a) to the Board to adjudicate and give an award that the appellant was entitled to dismiss the workmen.
The workmen contended that the reference under cl.
5(a) was incompetent as the appellant had ,not first taken proceedings under Cl.
Held, that the application under cl.
5(a) of the G. O. was not 24 186 maintainable, as the employer could not take advantage of cl.
5(a) during the pendency of an inquiry when Cl. 23 was applicable.
If cls.
5(a) and 23 were held to ' apply at the same time there would be disharmony as by resorting to cl.
5(a) when Cl. 23 was applicable, the employers would be contravening cl. 23 and rendering themselves liable to the penalties under section 26.
But there was complete harmony if it was held that cl.
5(a) applied in all other cases of dismissal or discharge except where an inquiry was pending within the meaning of Cl. 23.
Besides Cl. 23 was a special provision which prevailed over the general provisions in cl.
Kanpur Mill Mazdoor Union vs Employers ' Association of Northern India, , approved.
De Winton vs Brecon, , Churchill vs Crease, (182S) 5 Bing.
177 and United States vs Chase, ; , referred to. |
ppeal No. 209 of 1962.
Appeal by special leave from the judgment and order dated October 10, 1961, of the Gujarat High Court in Civil Revision Application No. 378 of 1960.
R. Ganapathy Iyer, B.R.G.K. Achar and K.L, Hathi, for the appellant.
M. section K. Sastri and M. section Narasimhan, for respondents.
314 1962.
May 4.
The judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This appeal, by special, leave, is against the judgment and decree of the High Court of Gujarat.
The appellant was a tenant of certain residential premises situate at Anand, and belonging to the respondents landlords.
Under a contract between the parties, he held them at Rs. 75/ per mensem according to Indian Calendar.
In 1951 the appellant applied for fixation of standard rent.
On March 31, 1954, the standard rent was fixed at Us.
25/. per mensem.
The appellant did not pay the arrears of rent from July 27, 1949, to July 5, 1954.
On October 16, 1954, the landlords gave him notice to quit the premises stating therein 'that rent for over six months was in arrears and that he was to quit on the last day of the month of tenancy which was Kartak Vad 30 of Samvat Year 2011.
The appellant neither paid the arrears of rent nor vacated the premises.
(in December 16, 1954, the respondents filed the suit for ejectment basing their claim for ejectment on the provisions of section 12(3) (a) of the Bombay Rents, Hotel and Lodging House rates Control Act, 1947 (Bom.
LVII of 1947), hereinafter called the Act.
Within two months of the institution of the suit, the appellant deposited an account of Rs. 1,075/ in Court, towards arrears of rent and, with the permission of the Court, the respondents withdrew a sum of Rs. 900/ which was the amount due for arrears up to that time.
The Trial Court decreed the suit for ejectment together with arrears of rent for three years and costs.
An appeal against the decree for ejectment was dismissed by the appellate Court.
The revision to the High Court was also uusuccessful, and, it is 315 against the order in revision that this appeal has been preferred.
Four points were urged before the High Court: (1) That the month of tenancy was not by the Indian Calendar, but was by the British Calendar and that the Courts below had ignored evidence in that regard.
(2) Assuming that the month of tenancy was by the Indian Calendar according to the lease, it would be deemed to be by the British Calendar in view of the provision of section 27 of the Act.
(3) As the arrears of rent had been paid within two months of the institution of the suit, the appellant be deemed to be ready and willing to pay the rent and that therefore the landlord was not entitled to recover possession of the premises.
(4) It is discretionary with the Court to pass a decree for ejectment in a. case under section 12(3) (a) of the Act, as the expression, used in that subclause is 'the Court may pass a decree for eviction in any such suit for recovery of possession. ' The High Court held that the findings of the Courts below that the month of tenancy was by the Indian Calendar was based on a consideration of the evidence on the record and therefore was binding.
It also held that it could not be deemed to be by the British Calendar in view of section 27 of the Act which provided that the rent would be recovered according to the British Calendar, notwithstanding anything contained in any contract and did not provide for the tenancy to be by the month according to the British Calendar even if the tenancy under the Contract was by a different Calendar.
The High Court also held that the tenant 's depositing arrears of rent within two months of the institution of the suit would not justify holding that the tenant was ready and willing to pay the amount of standard rent and that therefore the .landlord was not entitled to recover possession 316 of the premises in view of sub s.(1) of section 12 of the Act.
Lastly, the High Court held that the Court is bound to pass a decree for ejectment under section 12 (3) (a) if it be proved that the rent was payable by the month, that ' it had been in arrears for a period of six months and that the tenant failed to make payment of the arrears until the expiration of the period of one month after the service of notice referred to in sub.s.
(2) of that section.
, As a result, the revision was dismissed.
Two points have been urged for the appellant in this Court.
One is that the month of the tenancy was to be by the British Calender in view of section 2 7 of the Act and r. 4 framed thereunder, and that there could be no forfeiture of the tenancy when the arrears of rent had been paid within two months of the institution of the suit.
The significance of the first question is that if the appellant 's tenancy was to be by the month of the British Calendar, notice to quit was a bad notice as it did not comply with the requirements of s.106 of the Transfer of Property Act and that therefore there had been no determination of the tenancy which is a condition precedent for the landlord being entitled to possession and, coin.
sequently, for instituting a suit for ejectment on any ground whatsoever, including the ground of rent being in arrears.
The first point to determine, therefore, is whether it is a condition precedent for the institution of a suit by a landlord for the recovery of possession from a tenant who has been in arrears of rent that there had been first a determination of the contractual tenancy.
If it is not a condition precedent; it will not be necessary to determine whether the month of the tanancy continued to be according to the Indian Calendar according to the contract, or had been according to the British 317 Calendar in view of a. 27 of the Act, when a tenancy is created under a contract between the landlord and the tenant, that contract must hold good and continue to be in force till, according to law or according to the terms of contract, it comes to an end.
Section III of the Transfer of Property Act states the various circumstances in which a lease of immovable property determines.
Clause (b) provides for the determination of the lease on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other.
There is nothing in the act which would give a right to the landlord to determine the tenancy and thereby to got the right to( evict the tenant and recover possession.
This Act was enacted for the purpose of controlling the rents and repair of certain premises and of evictions due to the tendency of landlords to take advantage of the extreme scarcity of premises compared to the demand for them.
The Act intended therefore to restrict the rights which the landlords possessed either for charging excessive rents or for.
evicting tenants.
A tenant stood in no need of protection against eviction by the landlord so long as he had the necessary protection under the terms of the contract between him and the landlord.
He could not be evicted till his tenancy was determined according to law and therefore there was no necessity for providing any further protection in the Act against his eviction so long as his tenancy continued to exist under the contract.
Sub section(1) of section 12 of the Act provides that a landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the 318 provisions of the Act.
It creates a restriction on the landlords right to the recovery of possession.
When the landlord will have such a right is not provided by it.
Ordinarily, the landlord will have a right to recover possession from the tenant when the tenancy had determined.
The provisions of this section therefore will operate against the landlord after the determination of the tenancy by any of the modes referred to in a. III of the Transfer of property Act.
What this section of the Act provides is that even after the determination of the tenancy, a landlord will not be entitled to recover possession, though a right to recover possession gets vested in him, so long as the tenant complies with what he is required to do by this section.
It is this extra protection given by this section which will be useful to the tenant after his tenancy has determined.
The section does.
not create a new right in the landlord to evict the tenant when the tenant does not pay his rent.
It does not say so, and therefore, it is clear that a landlords right to evict the tenant for default in payment.
of rent will arise only after the tenancy is determined, and the continued possession of the tenant is not account of the contractual terms but on account of the statutory right conferred on him to continue in possession so long as he complies with what sub s.1 requires of him.
The landlord is restricted from evicting the tenant till the tenant does not do what he is required to do for peaceful possession under sub s.(1) of section 12.
We are therefore of opinion that where a tenant is in possession under a lease from the landlord, he is not to be evicted for a cause which would give rise to a suit for recovery of possession under s.12 if his 'tenancy has not been determined already.
It follows that whenever a tenant acts in a way which would remove the bar on the landlord 's right to evict him it is necessary for the landlord to serve him with.
a notice 319 determining his tenancy and also serve him with a notice under sub s.(2) of section 12 of the Act.
In this connection reference may be made to what wag stated in Dr. K. A. Dhairyawan vs J. R. Thakur .(1).
In that case, the landlord granted a lease of a parcel of land to the lessees for a certain period.
The lessee was to construct a building on that land.
On the termination of the lease, the lessees were to surrender and yield up the demised promises including the building to the lessors.
After the expiry of the period of the lease, the lessor sued for a declaration that they were entitled to the building and were entitled to claim possession of the same.
The lessees pleaded that they were also lessees of the building and were protected from eviction therefrom by the provisions of the Bombay Rents, Hotel and lodging House Control Act, 1947, and that the covenant for delivering possession of that building could not be enforced as the lease in respect of the land could not be terminated on account of the protection given by the Act.
It was held that under the lease there was a demise only of the land and not of the building, and, consequently, the provisions of the Act dit not apply to the contract of delivery of possession of the building.
It was contended that even in such a case, possession of the building could not be given until the lease bad been determined, which in law, could not be determined so long as the respondents could not be evicted from the demised land of which they were tenants within the meaning of the Act.
This contention was repelled.
It was said at p. 808: "This contention is without force as the provisions of the Act do not provide for the continuation of a lease beyond the specified period stated therein.
All that the Act does is to give to the person who continues to (1) ; 320 remain in possession of the land, although the period of the lease had come to an end, the status of a statutory tenant.
That is to say, although the lease had come to an end but the lessee continued to remain in possession without the consent of the lessor, he would nonetheless be a tenant of the land and could not be evicted save as provided by the Act.
" This means that the provisions of the Act did not affect the terms of the lease according to which the lease came to an end after the expiry of the period for which it was given.
The lessee 's possession after the expiry of the lease was by virtue of the provisions of the Act and not by virtue of the extension of the period of the lease.
It is a necessary consequence of this view that the restriction on the landlord 's right to recover possession under section 12 of the Act operates after he has determined the tenancy and that till then the rights between the parties with respect to eviction would be governed by the Ordinary law.
It was said in Ragbubir Narayan Lotlikar vs Fernandez (1).
Rents, Hotel and Lodging House Rates Control Act (Bom Act LVII of 1947): ,, 'In our opinion, s.28 applies only to those suits between a landlord and a tenant where a landlord has become entitled to possession or recovery of the premises demised.
Under the Transfer of Property Act a landlord becomes entitled to possession when there is a determination of tenancy.
A tenancy can be determined in any of the modes laid down in section 111; and once the tenancy is determined, under s.108 (q) the lessee is bound to put the lessor into possession of the property.
It (1) , 511. 321 is, therefore, only on the determination of the lease or the tenancy that the landlord be comes entitled to the possession of the pro perty, and when he has so becomes entitled to possession, if he files a suit for a decree for possession, then section 28 applies and such a suit can only be filed in the Small Causes Court.
" Again it was said at the same page: "Section 12 postulates the fact that landlord is entitled to recovery of possession and he is only entitled to possession under the provisions of the Transfer of Property Act.
It is only when he so becomes entitled that the Legislature steps in and prevents the enforcement of his right by the protection which it gives to the tenant.
No question of the application of section 12 can arise if a landlord is not entitled to possession at all.
" A similar view was expressed in Karsandas vs Karsanji (1) It was said: ". that a tenancy must be duly determined either by a notice to quit or by efflux of time or under one or the other of the clauses of section III, T. P, Act before a landlord can one to, evict his tenant on any of the grounds contained in the clauses of s 13 (1) of the Bombay Rent Act as applied to Saurashtra.
Therefore a notice determining the tenancy and calling upon the tenant to quit was in this case a necessary prerequisite to the institution of the suit.
" The cases reported as Rai Brij Raj Krishna vs section K. Shaw and Brothers (2) and Shri Hem Chand vs Shrimati Sham Devi (3) are distinguishable.
In, the former case, s.11 of the Bihar Buildings (1) A.I.R. (1953) Sau.
113, 118.
(2) ; ,150.
(3) I.L.R. (1955) Punj.
322 (Lease, Rent and Eviction) Control Act, 1947, (III of 1947), came for interpretation by this Court and, in that connection it was said "Section II beings with the words 'Not withstanding anything contained in any agree ment or law to the contrary ', and hence any attempt to import the provisions relating to the law of transfer of property for the inter pretation of the section would seem to be out of place.
Section 11 is a self contained sec tion, and it is wholly unnecessary to g o outside the Act for determining whether a tenant is liable to be evicted or not, and under what conditions he can be evicted.
It clearly provides that a tenant is not liable to be evicted except on certain conditions, and one of the conditions laid down for the eviction of a month to month tenant is non payment of rent.
" In the present case, section 12 of the Act is differently worded and cannot therefore be said to be a complete Code in itself.
There is nothing in it which overrides the provisions of the Transfer of Property Act.
Shri Hem Chand 's Case (1) dealt with the provisions of s.13(i) of the Delhi and Ajmer Merwara Rent Control Act XXXVIII of 1952.
This section provided that no decree or order for the recovery of possession of any promises shall be passed by any court in favour of the landlord against a tenant, notwithstanding anything to the contrary contained in any other law or any con tract.
It was held that the Rent Control Act provided the procedure for obtaining the relief of ejectment and that being so the provisions of section 106 of the Transfer of property Act had no relevance, in considering an application for ejectment (1) I.L.R. (1955) Punj 36.
323 made under that Act.
There is nothing in the Act corresponding to the provisions of section 13(1) of the Delhi Ajmer Merwara Act.
It is unnecessary for us to consider whether Shri Hem Chand 's case was rightly decided or not.
In Meghji Lakhamahi and Brothers V. Furniture Workshop (2) the Privy Council dealt with an application for possession under section 16 of the Increase of rent (Restriction) Ordinance, No. 23 of 1949 (Kenya) whose relevant portion is : "(1) No order for the recovery of possession of any premises to which this Ordinance applies, or for the ejectment of a tenant therefrom, shall be made unless . (k) the landlord requires possession of the premises to enables the reconstruction or rebuilding thereof to be carried out. " It was said : "In the present case the only question is whether section 16(i) (k) is so framed as to envisage or make provision for such an order.
An application for possession under section 16 presupposes that the contractual tenancy of the demised premises has been determined.
It is not possible to determine it as to part and keep it in being as to the remainder.
In the present case the tenancy of the entire demised premises had been determined.
" The right to possession is to be.
distinguished from the right to recover possession.
The right to possession arises when the tenancy is determined.
The right to recover possession follows the right to possession, and arises when the person in possession does not make over (1) I.L.R. (1955) Punj.
(2) ,90. 324 possession as he is bound to do under law, and there arises a necessity to recover possession through Court.
The cause of action for going to Court to recover possession arises on the refusal of the person in possession, with no right to possess, to deliver possession.
In this context, it is clear that the provisions of section 12 deal with the stage of the recovery of possession and not, with the stages prior to it and that they come into play only when the tenancy is determined and a right to possession has come in existence.
Of course, if there is not contractual tenancy and a person is deemed to be a tenant only on account of a statute giving him right to remain in possession, the right to possession arises on the person in possession acting in a manner which, according to the statute, gives the landlord right to recover possession, and no question for the determination of the tenancy arises, as really speaking, there was no tenancy in the ordinary sense of that expression.
It is for the sake of convenience that the right to possession, by virtue of the provisions of a statute, has been referred to as statutory tenancy.
In Ebner vs Lascelles (1) It was said, dealing with the provisions of Increase of Rent and Mortgage Interest (Restrictions) Act, 1920 (10 and 11 Geo. 5, c. 17) : "It has been truly said that the main rights conceded to a tenant under these Acts are, first a right to hold over or 'status of irremovability, ' and, next, a right not to have his rent unduly raised.
The right to hold over is a right that comes into existence after the expiration of the contractual tenancy.
During the contractual tenancy the tenant, being in possession under the protection of his contract, has no need of the protection of the Act to enable him to retain possession, but (1) ,497. 325 during that tenancy the Act protects him in regard to rent by providing that, notwith standing any other agreements which he may make with his landlord as to rent, he is not to be charged a higher rent than the law allows, and if he is charged a higher rent than that he can have it reduced.
The right to hold over after the termination of the con tractual tenancy.
and the right to protection during the contractual tenancy are two right s which must be kept distinct from each other.
" It may be mentioned that section 5 of the aforesaid Act of 1920 provided that no order or judgment for the recovery of possession of any dwelling house to which the Act applied or for the ejectment of a tenant therefrom would be made or given unless the case fell within one of the clauses mentioned in sub.
s.(1).
We are therefore of opinion that so long as the contractual tenancy continues, a landlord cannot sue for the recovery of possession even if s.12 of the Act does not bar the institution of such a suit, and that in order to take advantage of this provision of the Act he must first determine the tenancy in accordance with the provisions of the Transfer of Property Act.
It is now necessary to determine whether a notice served on the appellant to quit the tenancy on October 16, 1954, the last date of the month according to the Hindu Calendar, as October 16 happened to be Kartik Vad 30 of section Y. 2011, the tenancy having commenced from Kartik Sud 1 of S.Y. 1963.
It is not disputed that originally the tenancy was according to the Hindu Calendar.
The contention for the appellant is that this month to month tenancy, according to the Hindu Calendar, was 326 converted to a similar tenancy according to the British Calendar in view of the provisions of s.27 of the Act and r. 4 of the Rules framed under the Act.
Section 27 of the Act reads: "(1) Notwithstanding anything contained in any law for the time being in force or any contract, custom or local usage to the contrary, rent payable by the month or year or portion of a year shall be recovered according to the British Calendar.
(2) The State Government may prescribe the manner in which rent recoverable according to any other calendar before the coming into operation of this Act shall be calculated and charged in terms of the British Calendar.
" Rule 4 of the Bombay Rents, Hotel and Lodging House hates Control Rules, 1948, hereinafter called the Rules, reads: "Calculation of rent according to British Calender.
If, before the Act comes into force, the rent in respect of any premises was chargeable according to a calendar other than the British Calendar, the landlord shall recover from the tenant rent for the broken period of the month, year or portion of the year immediately preceding the date on which the Act comes into force, proportionate amount according to the aforesaid Calendar month, year or portion of the year at which the rent was then chargeable.
After such date the landlord shall recover rent according to the British Calendar.
The rent chargeable per month according to the British 327 Calendar shall not exceed the rent which was chargeable per month according to the other calendar followed immediately before such date.
" There is nothing irk the aforesaid rule or the section about the conversion of the month of the tenancy from the month according to the Hindu calendar to the month according to the British Calendar.
They only provide for the recoverability of the rent according to the British Calendar.
Since the enforcement of the Act on February 13, 1948, the monthly rent would be for the month according to the British Calendar.
The monthly rent could be recovered after the expiry of a month from that date or the rent for the period from the 13th February to the end of the month could be recovered at the monthly rate and thereafter after the expiry of each Calendar month.
There is nothing in the section or the rule in regard to the date from which the month for recovery of rent should commence.
This provision was made probably, as a corollary, to the statute providing for standard rents.
Standard rents necessitate standard months.
There are a number of calendars in use in this country.
The Hindus themselves use several calendars.
The Muslims use a different one.
Some calendars are used for particular purposes.
It appears to be for the sake of uniformity and standardisation that a common calendar was to govern the period of the month of the tenancy and the date for the recovery of the rent.
Rule 4 provided a procedure for adjustment of the recovery of the rent according to a calendar other than the British Calendar, and further provided that the rent chargeable per month, according to the British Calender, would not exceed the rent which was chargeable per month according to the other calendar followed immediately before that date.
In the absence of any specific provision in the Act with respect to any alteration to be made in the period of the month of the 328 tenancy, it cannot be held merely on the basis of an alteration in the period for the recovery of rent that the monthly period of tenancy had also been changed.
The tenancy can be from month to month and the recoverability of the rent may not be from month to month and may, under the contract, be based on any period say, a quarter or half year or a year.
There is nothing in law to make the month for the period of recovering rent synchronize with the period of the month of the tenancy.
The tenancy must start on a particular date, and, consequently, its month would be the month from that date, according to the calendar followed.
The month of tenancy according to that calender are settled by contract from the commencement of, the tenancy.
The tenancy under a lease for a certain period starts from a certain date, be it according to the British Calendar or any other Calendar.
The period of, lease.
and consequently the tenancy, comes to an end at the expiry of that period according to the calendar followed by the parties in fixing the commencement of the tenancy.
A lease, even according to the British Calendar, can start from any intermediate date of the calendar month.
There is nothing in section 27 to indicate that the month of the tenancy to such a lease will start from the first of a regular month.
Section 27 simply states that the rent would be recovered according to the British Calendar without fixing the first date of the month as the date from which the month, for the purposes of the recovery of the rent, would be counted.
It follows that the month of the tenancy which commences on the 14th of a month, would be from the 14th to the 13th of the next month, according to the British Calendar.
The rent would be recoverable with respect .to this period of a month.
No interference with any such term of the contract has been made by any provision of the Act and therefore we hold that the provisions of section 27 of the Act and r. 4 of 329 the Rules, do not in any way convert the month of the tenancy according to the Indian Calendar to the month of the British Calendar.
The High court said in his judgment that Mr. Parghi, who was appearing for the appellant, was unable to cite any decision in support of the contention raised by him.
Our attention, however, has been drawn to two cases decided by the Bombay High Court.
They are Civil Revision Applications Nos. 247 of 1956 and 1583 of 1960 decided by Dixit and Tendolkar, JJ and Patwardban J., on February 22, 1957, and August 16, 1961, respectively.
The latter decision had to follow the earlier one.
In the earlier case, the notice to quit required the tenant to give possession on May 1, 1953.
The tenancy had commenced according to the Hindu Calendar.
The notice was given according to the British Calendar.
The High Court held the notice to be valid, agreeing with the contention that . the effect of the provisions of a. 27 of the Act was lo make the tenancy which was originally according to the Hindu Calendar, a tenancy according to the British Calendar.
The ratio of the decision, in the words of the learned Judges, is : "Now rent is payable for occupation by the defendant and therefore, the tenancy must be deemed to be one according to the British Calendar from the first of the month to the end of the month. . . .
Here is a local law which by section 27 makes the tenancy as one according to the British Calendar".
We are of opinion that this view is wrong.
We, therefore, hold that the notice to quit issued to the appellant was therefore a valid notice as held by the Court below and determined the tenancy of the appellant.
330 The second contention that, the appellant 's having paid the arrears of rent within 2 months of the institution of the suit, there would be no forfeiture of the tenancy has no force in view of the provisions of section 12 of the Act.
Sub section (2) permits the landlord to institute a, suit for the eviction of a tenant on the ground of non payment of rent after the expiration of one month from the service of the notice demanding the arrears of rent, and cl.
(a) of sub s.(3) empowers the Court to Pass a decree in case the rent had been payable by the month, there was no dispute about the amount of standard rent, the arrears of rent, had been for a period of six months and the tenant had neglected to make the payment within a month of the service of the notice of demand.
The tenant 's paying the arrears of rent after the institution of the suit therefore does not affect his liability to eviction and the Court 's power to pass a decree for eviction.
It is true that the expression used in el.
(a) of sub s.(3) is 'the Court may pass a decree for eviction in any such suit for recovery of possession ', but this does not mean as contended for the appellant, that the Court has discretion to pass or not to pass a decree for eviction in case the other conditions mentioned in that clause are satisfied.
The landlord became entitled to recover possession when the tenant failed to pay rent and this right in him is not taken away by any other provision in the Act.
The Court is therefore bound in law to pass the decree when the requirements of sub s (2) of s.12 are satisfied.
This is also clear from a comparison of the language used in cl.
(a) with the language used in cl.
(b) of sub section
(3) which deals with a suit for eviction which does not come within cl.(a) and provides that no decree for eviction shall be passed in such a suit if on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the 331 standard rent then due and thereafter continues to pay or tender in Court regularly such rent till the suit is finally decided and also pays costs of the suit as directed by the Court.
It is clear that where the legislature intended to give some benefit to the tenant on account of the payment of the arrears during the pendency of the suit, it made a specific provision.
In the circumstances, we are of opinion that the Court has no discretion and has to pass a decree for eviction if the other conditions of sub.s.
(2) of section 12 of the Act are satisfied.
The result therefore is that this appeal fails, and is accordingly dismissed with costs.
Appeal dismissed. | The appellant was a tenant of the respondents in respect of certain residential premises.
The tenancy was by the Indian Calendar.
The appellant did not pay arrears of rent for about 5 years and the landlords gave him notice to quit as he was in arrears of rent for more than six months and asked him to quit on the last day of the Indian month.
On the appellant 's failure to comply the landlords filed a suit for ejectment under section 12 (3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
Within two months of the institution of the suit the appellant deposited the arrears of rent.
The suit for ejectment was decreed.
The appellant contended that in view of section 27 of the Act and r. 4 the tenancy was deemed to be by the British Calendar and the notice to quit expiring with the end of the Indian month was invalid and that he should have been relieved against forfeiture.
The landlords contended that no notice to quit was necessary for filing the suit, that the notice given was valid and that there could be no relief against forfeiture.
Held, that the suit for ejectment was rightly decreed.
it was incumbent upon the landlords to determine the contractual tenancy by a proper notice before they could file a suit for the ejectment of the tenant on the ground of non.
payment of arrears under section 12(3) (a) of the Act.
The Act did not create a new right in the landlord to evict the tenant for nonpayment of rent; the right to evict was dependent upon a proper termination of the tenancy.
The Act gave extra protection to the tenant which he could avail of after his tenancy was determined.
There was nothing in section 12 of the Act which overrode the provisions of the transfer of Property Act.
The right to possession had to be distinguished from 313 the right to recover possession.
The right to possession arose on the determination of the tenancy and the right to recover possession arose under the Act after the right to possession had arisen.
Dr. K.A. Dhairyawan, vs J.R. Thakur, ; , Baghubir Narayan Lotlikar vs Fernandiz, (1952) Bom.
L.R. 505, Karsandas vs Karsanji, A.I.R. (1953) Sau.
113, Meghji Lakhamahi vs Furniture Workshop, and Ebner vs Lascelles, , referred to.
Bai Brij Bai Krishna vs S.K. Shaw and Bros. [1951] S.C.R. 145 and Shri Hem Chand vs Shrimati Sham Devi, I.L.R. 1955) Punj.
36, distinguished.
The notice to quit was a valid notice.
The original tenancy was according to the Indian Calendar and there was nothing in section 27 of the Act or in r.4 which converted it into a tenancy according to the British Calendar.
Section 27 and r. 4 merely provided for the recoverability of rent according to the British Calendar.
In view of the provisions of section 12 there could be no relief against forfeiture in the present case.
Section 12(3)(a) empowered the court to pass a decree for eviction in case of rent payable month by month if the arrears of rent had been for a period of six months and the tenant had neglected to make the payment within a month of the service of the notice of demand.
The payment of arrears after institution of the suit did not affect his liability to eviction and the court 's power to pass the decree.
The Court was bound to pass the decree when the requirments of the section were satisfied.where the ' legislature intended to give relief against forfeiture it made a specific provision. |
Appeal No. 498 of 1966.
Appeal by special leave from the order dated July 10, 1964 of the Industrial Tribunal Delhi in O.P. No. 79 of 1962.
Bishan Narain, P.C. Bhartari, J.B. Dadachanji and C.L. Chopra, for the appellant.
H.R. Gokhale, Janardan Sharma and T.R. Bhasin, for the respondent.
The Judgment of the Court was delivered by Bhargava, J.
The Central Bank of India Ltd., New Delhi has flied this appeal, by special leave, challenging an order of the Industrial Tribunal, Delhi, refusing to accord approval to an order of dismissal of the respondent, Prakash Chand Jain, under section 33(2)(b) of the (hereinafter referred to as "the Act").
A charge sheet, containing two charges was served on the respondent on 21st July, 1961 in order to initiate formally an enquiry for the purpose of taking disciplinary ,action against him.
The two charges flamed were as follows : "1.
On 14 1 1960, a sum of Rs. 30,400/ was paid to Mr. P.C. Jain by the Assistant Cashier Mr. Nand Kishore out of the cheque No. 43004 dated 14 1 60 drawn by Messrs Mool Chand Hari Kishan for Rs. 63,000/ .
Taking this money Mr. P.C. Jain on the same day i.e. 14 1 1960 left for Muzaffarnagar in company of some persons to retire the following bills drawn by M/s. Gupta Iron Industries :Naya Bazar LBC 3 drawn on Puran Chand .
Rs. 5,100/ Naya Bazar LBC 5 drawn on Hiralal Shyam.
Rs. 4,950/ Thus it was within the knowledge of Shri P.C. Jain that the bills of Messrs Gupta Iron Industries were drawn on bogus firms and that those were retired by drawer 's representative who accompanies Mr. P.C. Jain to Muzaffarnagar.
Instead of reporting, such serious matters to higher authorities, Mr. P.C. Jain claims that he had never visited Muzaffarnagar.
Mr. P.C. Jain encashed on 25 2:60 cheque No. 400506 for Rs. 46,000/ from the United Bank of India Ltd., Chandni Chowk and brought cash to Naya Bazar after 11.30 a.m.i.e.
after the time for presenting of the clearing cheques at the State Bank of India.
To cover the misdeeds of Mr. Shiv Kumar Sharma the then 737 Sub Agent of Naya Bazar Office, Mr. P.C. Jain Treasurer 's representative stated in his explanation dated 16 2 1961 that cash was received at the office at about 11 a.m.i.e.
before the clearing time.
The above acts of Mr. Jain were prejudicial to the interests of the Bank as defined in ' paragraph 521 4(J) of the Sastry Award and amount to gross misconduct.
The inquiry will be held on 12 8 1961 at Chandni Chowk Branch at 10.30 a.m. by Mr. P.B. Tipnis, Chief Agent, Agra." Subsequently, an enquiry was held by Mr. Tipnis, one of the senior Officers of the Bank.
The Enquiry Officer, after recording evidence tendered on behalf of the Bank as well as the evidence given by the respondent, recorded his findings holding that both the charges were proved against the respondent and, basis, came to the view that the actions of the respondent were prejudicial to the interests of the Bank and amounted to gross misconduct, so that he proposed to award the punishment of dismissal from the Bank 's service.
The respondent was given a week 's time to show cause against this proposed punishment and, thereafter, an order was made dismissing the respondent with effect from 18th July, 1962 and a month 's wages were paid to him in accordance with the provision contained in section 33(2)(b) of the Act.
Since an industrial dispute was pending before the Industrial Tribunal, Delhi, an application under section 33(2)(b) of the Act was made requesting the Tribunal to accord approval to this order of dismissal.
The Tribunal, when dealing with this application, held that the enquiry, which had been held by the Enquiry Officer, was fair and was not vitiated by any irregularity or unfairness, but refused to accord approval on the ground that the findings accorded by the Enquiry Officer were perverse and were not based on evidence inasmuch as most of the findings were the result of mere conjecture on behalf of the Enquiry Officer.
It is this order of the Tribunal that has been challenged in this appeal.
Learned counsel appearing for the appellant Bank urged that the Tribunal, in refusing to accord approval and in disregarding the findings recorded by 'the Enquiry Officer, exceeded its jurisdiction conferred by section 3 '3(2) (b) of the Act.
It was further ' urged that, when the Tribunal found that.
the enquiry was fair, the Tribunal had no jurisdiction to go into the question whether the findings of fact recorded by the Enquiry Officer were correct and could not sit in judgment over those findings like a Court of Appeal.
The Tribunal should have accepted those findings and only examined whether a prima facie case was made out for ' according an approval.
If the Tribunal had proceeded in accord 738 ance with this principle, there.
would have been no justification for the Tribunal to refuse to approve the order of dismissal.
The jurisdiction and functions of a Tribunal under section 33(2) (b) of the Act were 'explained by I this Court in Bangalore Woolien, Cotton and Silk Mills Company Ltd. vs Dasappa (B) (Binny Mills Labour Union) and Others(1), where it was held : "The settled position in law therefore is that permission should be refused if the tribunal is satisfied that the management 's action is not bona fide or that the principles of natural justice have been violated or that the materials on the basis of which the management came to a certain conclusion could not justify any reasonable person in coming to such a conclusion.
In most cases it will happen where the materials are such that no reasonable person could have come to the conclusion as regards the workman 's misconduct that the management has not acted bona fide.
A finding that the management has acted bona fide will ordinarily not be reached if the materials are such that a reasonable man could not have come to the conclusion which the management has reached.
In every case, therefore, it.
would be proper for the tribunal to address itself to the question, after ascertaining that the principles of natural justice have not been violated, whether the materials on which the management has reached a conclusion adverse to the workman, a reasonable person could reach such a conclusion.
" The point was again considered by this Court in the case of Lord Krishna Textile Mills vs Its Workmen(2) and it was held : "In view of the limited nature and extent of the enquiry permissible under section 33 (2)(b) all that the authority can do in dealing with an employer 's application is to consider whether a prima facie case for according approval is made out by him or not.
If before dismissing an employee the employer has held a proper domestic enquiry and has proceeded to pass the impugned order as a result of the said enquiry, all that the authority can do is to enquire whether the conditions prescribed by section 33(2)(b) and the proviso are satisfied or not.
Do the standing orders justify the order of dismissal ? Has an enquiry been held as required by the standing order ? Have the wages for the month been paid as required by the proviso '?; and, has an application been made as prescribed by the proviso ?" (1) [1960] II L.L.J. 39.
(2) ; 739 The Court then proceeded to consider whether the Tribunal in that case had acted rightly, and noted that one had merely to read the order to be satisfied that the Tribunal had exceeded its jurisdiction in attempting to enquire if the conclusions of fact recorded in the enquiry were justified on the merits.
The Tribunal did not hold that the enquiry was defective or the requirements of natural justice had not been satisfied in any manner.
The Court then indicated that the Tribunal had proceeded to examine the evidence, referred to some discrepancies in the statements made by witnesses and had come to the conclusion that the domestic enquiry should not have recorded the conclusion that the charges had been proved against the workmen in question.
It was then held that, in making these comments against the findings of the enquiry, the Tribunal clearly lost sight of the limitations statutorily placed upon its power and authority in holding the enquiry under section 33(2)(b).
The Court then indicated the principle applicable by saying: "It is well known that the question about the adequacy of evidence or its sufficiency or satisfactory character can be raised in a court of facts and may fall to be considered by an appellate court which 'is.
entitled to consider facts; but these considerations are irrelevant where the jurisdiction of the court is limited as under section 33(2)(b).
It is conceivable that even in holding an enquiry under section 33(2)(b) if the authority is satisfied that the finding recorded at the domestic enquiry is perverse in the sense that it is not justified by any legal evidence whatever, only in such a case it may be entitled to consider whether approval should be accorded to the employer or not; but it is essential to bear in mind the difference between a finding which is not supported by any legal evidence and a finding which may appear to be not supported by sufficient or adequate or satisfactory evidence.
" These decisions make it clear that, when an Industrial Tribunal is asked to give its approval to an order of dismissal under section 33(2) (b) of the Act, it can disregard the findings given by the Enquiry Officer only if the findings are perverse.
The test of perversity that is indicated in these cases is that the findings may not be supported by any legal evidence at all.
This principle was further affirmed in a different context in State of Andhra Pradesh V.S. Sree Rama Rao, (1), where this Court had to consider whether a High Court, in a proceeding for a writ under article 226 of the Constitution, could interfere with the findings recorded by departmental authority ill disciplinary proceedings taken against a Government servant, The Court held : (1) ; 740 "But the departmental authorities are, if the enquuiry is otherwise properly held, the sole judges of facts and if there be some legal evidence on which their findings can be based, the adequacy or reliability of that evidence is not a matter which can be permitted to be canvassed before the High Court in a proceeding for a writ under Art, 226 of the Constitution." In this connection, reference was also made to some cases where this Court has held that a finding by a domestic tribunal like an Enquiry Officer can be held to be perverse in those cases also where the finding arrived at by the domestic tribunal is one at which no reasonable person could have arrived on the material before the tribunal.
Thus, there are two cases where the findings of a domestic tribunal like the Enquiry Officer dealing with disciplinary proceedings against a workman can be interfered with,and these two are cases in.
which the findings are not based on legal evidence! or are such as no reasonable person could have arrived at on the basis of the material before the Tribunal.
In each of these cases, the findings are treated as perverse.
It is in the light of these principles that we have to see whether the Industrial Tribunal, Delhi, in the present case, was justified in refusing to accord approval to the order of dismissal which was passed on the basis of the evidence recorded 'by the Enquiry Officer, Mr. Tipnis.
We have already reproduced above the charges that were framed against the respondent and we proceed to examine how far the Tribunal was correct in holding that the Enquiry Officer 's findings on these charges were without legal evidence and were based merely on conjecture.
The first charge consisted of the following elements : (i) that on 14 1 1960, a sum of 30,400 was paid to the respondent by the Assistant Cashier Nand Kishore out of the amount payable on a cheque drawn by M/s. Mool Chand Hari Kishan for Rs. 63.000; ' (ii) that the respondent left the same day for Muzaffarnagar; (iii) that he left for Muzaffarnagar in company of some persons to retire the bills drawn by M/s. Gupta Iron Industries; (iv) that these bills of M/s. Gupta Iron Industries had been drawn on bogus firms; (v) that these bills were retired by the drawer 's representative who accompanied the respondent to Muzaffarnagar; 741 (vi) that the respondent failed to report these serious matters to higher authorities; and (vii) that the respondent, instead, wrongly claimed that he had never visited Muzaffarnagar.
The Tribunal in its Order has held that on all these elements the findings recorded by the Enquiry Officer were perverse, because they were based on hearsay evidence and on conjecture.
Learned counsel appearing for the Bank took us through the entire evidence recorded by the Enquiry Officer in order to canvass his argument that these findings recorded by the Enquiry Officer were based on the material before him.
We have found that, on two of these points, there was material before the Enquiry Officer which could be held to be legal evidence and, consequently, we have to hold that, on those two points, the Tribunal was incorrect in recording its view that the findings of the Enquiry Officer were defective and could be disregarded by the Tribunal.
These two are elements Nos.
(ii) and (vii).
The finding that the respondent left for Muzaffarnagar on 14 1 1960 was based on the inferences drawn by the Enquiry Officer from the records of the Branch of the Bank in which the respondent was working on that day.
The facts found by the Enquiry Officer were that, in the cash receipt book of that date, there were only four entries in the handwriting of the respondent that he made no payments on that day; that, though he was in charge of the entire cash department, he had no knowledge that cash of Rs. 1 sac was brought from the Chandni Chowk Office of the Bank three times during that day; that the Godown Keeper had also verified several vernacular signatures when it was the respondent 's duty only to verify them; and that the cash account of that day was closed by the Godown Keeper instead of the respondent who should have done so if he was in the Bank until the closure of the work on that day.
These circumstances were brought to the notice of the Enquiry Officer from the records of the Bank by Management 's witness, J.J. Daver.
In our opinion, the Tribunal was incorrect in holding that the Enquiry Officer was acting on mere conjecture when, on the basis of these circumstances, he drew the inference that the respondent had left his work in the Naya Bazar Branch of the Bank on 14 1 1960 after working there for a short time only.
Further, the Enquiry Officer in his report mentioned that three witnesses, S: C.L. Chawla, Officer Incharge of the Muzaffarnagar Office of the Bank, Inder 'Sain Jain, Cashier in the Muzaffarnagar Office, and Nihalchand Jain, who was a Clerk in the Muzaffarnagar Office, had stated that they had seen the respondent at Muzaffarnagar Office on 14 1 1960, and relied on their evidence to hold that the respondent did go to Muzaffarnagar on that day leaving his work in the Naya Bazar Office of the Bank at Delhi.
The Tribunal criticised the evidence of these three witnesses and 742 came to the view that the Enquiry Officer was not justified in believing these witnesses and in holding on the basis of their evidence that the respondent was in Muzaffarnagar on that day.
It is clear that, in adopting this course, the Tribunal exceeded its powers.
It was not for the Tribunal to sit in judgment over the view taken by the Enquiry Officer about the value to be attached to the evidence of these witnesses, even though the Tribunal thought that these witnesses were unreliable because of circumstances found by the Tribunal in their evidence.
What the Tribunal at this stage did was to interfere with the finding of fact recorded by the Enquiry Officer by making a fresh assessment on the value to be attached to the evidence of these witnesses which was not the function of the Tribunal when dealing with an application under section 33 (2 )(b) of the Act.
In these two respects.
we find that the Tribunal fell into an error.
However, we find that, on the other ingredients of the first charge, the Tribunal was justified in arriving at the conclusion that the findings recorded by the Enquiry Officer Were perverse.
The Tribunal gave the reason that these findings were based on hearsay evidence.
This view taken by the Tribunal appears to be fully justified.
The first and the third elements of the charge relating to payment of the sum of Rs. 30.400 to the respondent by Nand Kishore, and of the respondent leaving for Muzaffarnagar in the company of some persons in order to retire the bills drawn by M/s. Gupta Iron Industries, were sought to be proved before the Enquiry Officer by the evidence of the Internal Auditor, N. N. Vazifdar, but the latter could not give any direct evidence.
as he was not present at the time when money was paid to the resplendent or when the respondent left for Muzaffarnagar.
He purported to prove these elements of the charge by deposing that a statement was made to him by Nand Kishore to the effect that Nand Kishore had paid Rs. 30,400 to the respondent and that, thereafter, the respondent left for Muzaffarnagar in the company of two persons.
The Enquiry Officer accepted this evidence of Vazifdar, but, ignored the.
fact that Vazifdar 's evidence was not direct evidence in respect of the elements of the charge sought to be proved, and that Vazifdar was only trying to prove a previous statement of Nand Kishore which, as rightly held by the Tribunal, would amount to hearsay evidence.
Nand Kishore himself was also examined as a witness, but, in his evidence, which was admissible as substantive evidence, he made no statement that this sum of Rs. 30,400 was paid by him to the respondent or that the respondent left for Muzaffarnagar in the ' company of some persons to retire the bills drawn by M/s. Gupta Iron Industries.
In fact.
Nand Kishore even went further and denied that he had made any statement to Vazifdar as stated by Vazifdar.
The Enquiry Officer was, of course, entitled to form his own opinion and 743 to believe Vazifdar in preference to Nand Kishore; but, on this basis, the only finding that the domestic tribunal could record was that Nand Kishore 's statement given before him was incorrect and that Nand Kishore had made statements to Vazifdar as deposed by Vazifdar.
Those statements made by Nand Kishore to Vazifdar could not, however, become substantive evidence to prove the correctness of these elements forming part of the charge.
It is in this connection that importance attaches to the views expressed by this Court in the cases cited above, where it was pointed out that a finding of a domestic tribunal may be perverse if it is not supported by any legal evidence.
It is true that, in numerous cases, it has been held that domestic tribunals, like an Enquiry Officer, are not bound by the technical rules about evidence contained in the Indian Evidence Act; but it has nowhere been laid down that even substantive rules, which would form part of principles of natural justice, also can be ignored by the domestic tribunals.
The principle that a fact sought to be proved must be supported by statements made in the presence of the person against whom the enquiry is held and that statements made behind the back of the person charged are not to be treated as substantive evidence, is one of the basic principles which cannot be ignored on the mere ground that domestic tribunals are not bound by the technical rules of procedure contained in the Evidence Act.
In fact, learned counsel for the appellant Bank was unable to point out any case at all where it may have been held by this Court or by any other Court that a domestic tribunal will be justified in recording its findings on the basis of hearsay evidence without having any direct or circumstantial evidence in support of those findings.
In the case of Khardah Co. Ltd. vs Their Workmen(1), this aspect was noted by this Court as follows : "Normally, evidence on which the charges are sought to be proved must be led at such an enquiry in the presence of the workman himself.
It is true that in the case of departmental enquiries held against public servants, this Court has observed in the State of Mysore vs
S.S. Makapur(2) that if the deposition of a witness has been recorded by the ' enquiry officer in the absence of the public servant and a copy thereof is given to him, and an opportunity is given to him to cross examine the witness after he affirms in a general way the truth of his statement already recorded, that would conforms the requirements of natural justice; but as has been emphasised by this Court in M/s. Kesoram Cotton Mills Ltd. vs Gangadhar(3) these observations must be applied (1) ; at pp.
512 13.
(2) ; (3) ; 744 with caution to enquiries held by domestic tribunals against the industrial employees.
In such enquiries, it is desirable that all witnesses on whose testimony the management relies in support of its charge against the workman should be examined in his presence.
Recording evidence in the presence of the workman concerned serves a very important purpose.
The witness knows that he giving evidence against a particular individual who is present before him, and therefore, he is cautious in making his statement.
Besides, when evidence is recorded in the presence of the accused person, there is no room for persuading the witness to make convenient statements, and it is always easier for an accused person to cross examine the witness if his evidence is recorded in his presence.
Therefore, we would discourage the idea of recording statements of witnesses ex parte and then producing the witnesses before the employee concerned for cross examination after serving him with such previously recorded statements, even though the witnesses concerned make a general statement on the latter occasion that their statements already recorded correctly represent what they stated.
" In the case of M/s. Kesoram Cotton Mills Ltd. vs Gangadhar and Others(1) referred to in the quotation above, it was held : "Even so, the purpose of rules of natural justice is to safeguard the position of the person ' against whom an inquiry is being conducted so that he is able to meet the charge laid against him properly.
Therefore, the nature of the inquiry and the status of the person against whom the inquiry is being held will have some bearing on what should be the minimum requirements of the rules of natural justice.
Where, for example, lawyers are permitted before a tribunal holding an inquiry and the party against whom the inquiry is being held is represented by a lawyer, it may be possible to say that a mere reading of the material to be used in the inquiry may sometimes be sufficient see New Prakash Transport Co. vs New Suwarna Transport Co. (2)] but where in a domestic inquiry in an industrial matter lawyers are not permitted, something more than a mere reading of statements to be used will have to be required in order to safeguard the interest of the industrial worker.
Further, we can take judicial notice of the fact that many of our industrial workers are illiterate and sometimes even the representatives of labour union may not (1) ; (2) 745 be present to defend them.
In such a case, to read over a prepared statement in a few minutes and then ask the workmen to cross examine would make a mockery of the opportunity that the rules of natural justice require that the workmen should have to defend themselves.
It seems to us, therefore, that when one is dealing with domestic inquiries in industrial matters, the proper course for the management is to examine the.
witnesses from the beginning to the end in the presence of the workman at the enquiry itself.
Oral examination always takes much longer than a mere reading of a prepared statement of the same length and bring home the evidence more clearly to the person against whom the inquiry is being held.
Generally speaking, therefore, we should expect a domestic inquiry by the management to be of tiffs kind.
" Proceeding further, the Court held : "The minimum that we shall expect where witnesses are not examined from the very beginning at the inquiry in the presence of the person charged, is that the person charged should be given a copy of the statements made by the witnesses which are to be used at the inquiry well in advance before the inquiry begins and when we say that the.
copy of the statements should be given well in advance, we mean that it should be given at least two days before the inquiry is to begin.
If this is not done and yet the witnesses are not examined in chief fully at the inquiry, we do not think that it can be said that principles of natural justice which provide that the person charged should have an adequate opportunity of defending himself are complied with in the case of a domestic inquiry in an industrial matter." These views expressed by this Court, in our opinion, bring out what was meant when this Court held that findings recorded by an Enquiry Officer must be supported by legal evidence.
The evidence, as indicated in these cases, should consist of statements made in the presence of the workman charged.
An exception was envisaged where the previous statement could be used after giving copies of that statement well in advance to the workman charged, but with the further qualification that previous statement must be affirmed as truthful in a general way when.
the witness is actually examined in the.presence of the workman.
Applying this principle to the present case, it is clear that the previous statement made by Nand Kishore to Vazifdar could not be taken as substantive evidence against the respondent, because 746 Nand Kishore did not affirm the truth of that statement when he appeared as a witness and, on the other hand, denied having made that statement altogether.
Even though his denial may be false, that fact would not convert his previous statement/into substantive evidence to prove the charge against the respondent when that statement was given to Vazifdar in the absence of the respondent and its truth is not affirmed 'by him at the time of his examination by the Enquiry Officer.
This statement of Nand Kishore made to Vazifdar being ignored, it is clear that no other material was available to the Enquiry Officer on the basis of which he could have held that the sum of Rs. 30,400 was paid to the respondent by Nand Kishore and that Nand Kishore, there.after left for Muzaffarnagar in the company of some persons with that money.
The fourth element of the charge was that the bills of M/s. Gupta Iron Industries were drawn on bogus firms.
We think that the Tribunal is quite correct in its comment that the Enquiry Officer, in holding that the bills were drawn on bogus firms, proceeded to do so without any evidence altogether.
In fact, the Enquiry Officer has not referred to any material which was available to him before accepting the allegation against the respondent that the bills had been drawn.
on bogus firms.
Even in the course of his submissions before us, learned counsel for the Bank was unable to point out any evidence which would support this part of the charge.
The only evidence to which learned counsel could refer was the statement of Nihal Chand Jain who said that intimations of the bills were sent to the parties: mentioned in the bills by post, but were received back unserved.
Those intimations were not produced before the Enquiry Officer and there is no mention of the reason why the postal authorities returned those intimations.
The mere return of the intimations could not possibly lead to the inference that the parties, to whom they were addressed, were bogus.
It is quite likely that their addresses there incomplete, so that the postal authorities were unable to trace them.
Clearly, in these circumstances, the finding on this point recorded by the Enquiry Officer was without any evidence or material.
The same remarks apply with regard to the element of the charge to the effect that the bills were retired by the drawer 's representative who accompanied the respondent to Muzaffarnagar.
: 'The Enquiry Officer again does not mention any witness who may have stated that the bills were retired by the drawer 's representative or that representative had accompanied the respondent.
The only evidence on this point, to which our attention was ,drawn, was that of T.C. Jain who purported to prove a previous :statement of Inder Sain Jain made to him.
According to T.C. 747 Jain, Inder Sain Jain had come to him and told him that Prakash Chand Jain had come with the representative of the drawer to retire the bills, This evidence of T.C. Jain was rightly not relied upon or referred to by the Enquiry Officer, because Inder Sain Jain, when he appeared as a witness before him, did not state, that he had made any such statements to T.C. Jain and, in his examination, he excluded the possibility of his having made that statement.
According to Inder Sain Jain 's statement before the.
Enquiry Officer, the respondent only accosted him once and bid him "Jai Ram Ji Ki".
He had no other talk with him.
He also.
stated that this happened about two hours after the bills had been retired.
Consequently, according to Inder Sain Jain 's statement before the Enquiry Officer, the respondent was not present when the bills were retired and there was no question of the respondent.
accompanying the drawer 's representative for retiring the bills.
Inder Sain Jain also did not state that the bills were retired by the representative of the drawer.
Thus, on this point also, there is no legal evidence on which a. finding could have been recorded against the resrpondent.
So far as the sixth element of the charge is concerned, that becomes totally immaterial when it is found that the Enquiry Officer 's findings that the bills were drawn on bogus firms and that they were retired by the drawer 's representative accompanying the respondent are held to have been given without any legal evidence.
If the bills are not proved to have been drawn on bogus firms and to have been retired by the drawer 's representative with the aid of the respondent, there was nothing that the respondent was required to convey to higher authorities.
So far as the second charge is concerned, we find that, similarly, the principal findings given by the Enquiry Officer are not supported by any legal evidence.
The substance of the charge was that the respondent encashed the cheque for Rs. 46,000 ' from the United Bank of India Ltd. and brought the cash after 11.30 a.m., but wrongly stated that he had brought the cash to the Naya Bazar Office of the Central Bank before 11 a.m.
The significance of the time we emphasised by the Enquiry Officer because, according to him, 11 a.m. was the clearing time of another cheque of Rs. 15,000 which had been marked as "good for payment" by the then Sub Agent, Shiv.
Kumar Sharma and the respondent had to show that cash in respect of the other cheque of Rs. 46,000 had been brought to the Bank at Naya Bazar for deposit in the account of the Drawer of that cheque of Rs. 15,000 so as to justify the endorsement made by the Sub Agent that it was 'good for payment '.
We examined the whole record and we are unable to find any evidence at all in support of the fact accepted by the Enquiry Officer that the clearing time was 11 a.m.
On the contrary, the only evi 748 dence on this point, which was that of Management 's witness J.J. Daver, was to the effect that the clearing time was 11.30 a '.m.
Ignoring tiffs evidence altogether, the Enquiry Officer proceeded to record his findings against the respondent on the basis that the clearing time was 11 a.m. without at all referring to any evidence in support of this fact.
The second significant point was as to the time by which the respondent brought the cash in respect of the cheque of Rs. 46,000/ from the United Bank of India Ltd., Chandni Chowk, to his own Central Bank Branch in Naya Bazar.
No one gave any ' direct evidence as to the time when the respondent brought the money.
The Enquiry Officer has proceeded to hold that the money could not have been brought before 11 a.m. because there is an endorsement on that cheque of Rs. 46 '000/which, according to the Enquiry Officer, shows that cheque was presented for encashment at the United Bank of India Ltd., Chandni Chowk, at 11.15 a.m.
This endorsement was also examined by us as it appeared on the photo stat copy of the cheque.
The endorsement consists of a number 37 beneath which as noted the time 11.15 a.m. with a line drawn between them.
From this endorsement alone, the Enquiry Officer proceeded to infer that this cheque was presented for encashment at 11.15 a.m., even though no evidence at all was given by anyone working in the United Bank of India Ltd., Chandni Chowk, to prove that this endorsement of time of 11.15 a.m. represented the time of presentation of the cheque at that Bank.
In fact the Enquiry Officer has not made reference to any evidence at all when holding that this cheque was presented for payment at 11 a.m. at the counter of the United Bank of India.
Learned counsel for the Bank, however, referred us to the evidence of J.J. Daver on this point.
Darer in this case was discharging a dual function as a witness and as the prosecutor of the case against the respondent for the Bank.
In his evidence, Darer stated that this endorsement represented the time when the token was issued to the person encasing the cheque.
Later, while prosecuting the case against the respondent on behalf of the Bank, Darer urged before the Enquiry Officer that this endorsement of 11.15 a.m. represented the time of presentation of the cheque and this was noted by the Enquiry Officer in his proceedings.
Obviously, the time of presentation of the cheque and the time of issue of 'the token in respect of it would not be identical.
In fact, there can be a lapse of an appreciable interval between the two.
In spite of this fact, the Enquiry Officer seems to have proceeded on the basis 'of what was urged before him by J.J. Darer while acting as prosecutor, and what was stated in that capacity was not evidence at all.
The evidence given by Darer was different and that was not relied upon by the Enquiry Officer.
On the face of it, the proper evidence, by which it could have been proved that the cheque was either presented at 11.15 a.m. or that the token in respect of it 749 was issued at 11.15 a.m., could have been obtained if the Bank had cared to examine the person in charge of encashing the cheque at the United Bank of India, Chandni Chowk.
Daver was not present when the cheque was presented and he has not explained on what basis he stated in his evidence that this endorsement represented the time when the token was issued.
It is clear that, era this charge also on the two crucial points of the time, viz., the clearing time of the cheque of Rs. 15,000/ as well as the time when the second cheque of Rs. 46,000/ was presented for encashment at the United Bank of India Ltd., Chandni Chowk, the Enquiry Officer has recorded findings without those findings being supported by any legal evidence.
In these circumstances, it is clear that the Tribunal was fully justified in holding that the findings recorded by the Enquiry Officer on both the charges were perverse in the sense of not being supported by any legal evidence, of course, with the exception of the finding recorded to the effect that on 14 1 1960 the respondent, after doing some work in the Naya Bazar Branch of the Bank, left for Muzaffarrnagar and was seen in Muzaffarnagar on that day.
It was to this liraired extent that the first charge only could have been held to have been proved before the Enquiry Officer against the respondent.
On this limited proof and on holding that the Enquiry Officer 's findings were correct in respect of this part of the charge only, the Tribunal would be fully justified in withholding its approval of the order of dismissal which was passed by the Bank on the basis that all the elements of both the charges had been proved.
The order of the Tribunal refusing to grant approval was, therefore, not vitiated by any error and must be upheld.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed. | The respondent was an employee of the appellant.
After a domestic inquiry in respect of alleged misconduct he was dismissed.
As an industrial dispute was pending an application was made to the Industrial Tribunal under section 33(2)(b) of the .
The tribunal held that though the enquiry was fair, the findings of the enquiry Officer were perverse and therefore it did not give its approval the order of dismissal.
By special leave the appellant came to this Court, contending that since the enquiry was held to be fair the Tribunal no jurisdiction to interfere with the findings of fact arrived at by the Enquiry Officer.
HELD: (i) Earlier decisions of 'this Court make it clear that when in Industrial Tribunal is asked to give its approval to an order of dismissal under section 33(2)(b) of the Act, it can disregard the findings given y the Enquiry Officer only if the findings are perverse.
The findings are reverse when either they are not based on legal evidence or they are such as no reasonable person could have arrived at on the basis of material before the domestic tribunal.
[739 G 740 C] Bangalore Woolien, Cotton and Silk Mills Company Ltd. vs Dasappa B) (Binny Mills Labour Union) & Ors.
[1960] II L.L.J. 39, Lard Krishna Textile Mills vs Its Workmen, ; , State lndhra Pradesh vs
section Sree Rama Rao; , , applied.
(ii) A domestic tribunal though not bound by the technical rules rout evidence contained in the Indian Evidence Act cannot ignore subsintive rules which would form part of principles of natural justice.
The principle that a fact sought to be proved must be supported by statements lade in the presence of the person against whom the enquiry is held nd that statements made behind the back of the person charged are not be treated as substantive evidence, is one of such basic principles which.
domestic tribunal cannot disregard.
The previous statement of a witness not substantive evidence unless affirmed as truthful by the witness when actually examined in the presence of the workman charged.
A finding by the domestic tribunal based not on substantive evidence but on hearsay, is perverse, because hearsay is not legal evidence.
[743 C E; 745 Khardah Co. Ltd. vs Their Workmen, ; , State of ysore V.S.S. Makapur; , and M/s. Kesoram Cotton ills Ltd. vs Gangadhar, ; , relied on.
(iii) In the present case the findings of the Enquiry Officer were held by the Industrial Tribunal to be perverse as they were not sed on legal evidence and were not justified by the material before m. [749 C E] 736 |
98 of 1956.
Petition under Article 32 of the Constitution of India for enforcement of fundamental rights.
N. C. Chatterjee and section C. Majumdar, for the petitioner.
P. A. Mehta, R. Ganapathy Iyer and R. H. Dhebar, for the respondents NOS. 1, 2, 3 and 5. 1957.
May 8.
The Judgment of the Court was delivered by GOVINDA MENON, J.
This application under article 32 of the Constitution raises the question of the constitutionality of section 178 A, inserted in the Sea Customs Act, (VIII of 1878), by section 14 of the Amending Act XXI of 1955, and the chief ground on which it is sought to be struck down is that it offends article 14 of the Constitution.
From the affidavits of both the parties to which there are annexures the following facts emerge: The petitioner carries on business as a broker in diamonds and precious stones in Calcutta and, according to him, he enjoys credit and reputation in the market as a well known and respectable broker of such goods.
On May 4, 1955, the Rummaging Inspector (Intelligence), Customs House, Calcutta, Respondent No. 3, armed with a search warrant from the Chief Presidency Magistrate, Calcutta, Respondent No. 4, searched the residential room of the petitioner, situated at No. 32, Sir Hariram Goenka Street, Calcutta, and after a minute search of the steel almirah in which according to the statement of the petitioner, he used to keep his stock in trade and finding none there questioned him as to where he had secreted the diamonds to which the 1112 reply given by him was in the negative.
Thereupon a wall almirah, wherein washed clothes, and other articles were stored, was searched and therein in an old jacket 475 pieces of diamonds were discovered along with one piece of synthetic stone.
A statement signed by him was taken from which we find that his explanation for the possession was that Rs. 10,000/ worth of diamonds were received by him from M/s. Ratilal Amritlal, of 89 Zaveri Bazar, Bombay, and the rest were purchased locally in Calcutta.
He did not remember the names and address of the parties from whom the local purchases were made, nor did he have in his possession any documents covering the purchase.
Thereafter the Rummaging Inspector escorted the petitioner to the Customs House where the Assistant Collector, Customs, asked him to produce evidence showing that the goods were not smuggled goods but were legally imported on payment of duty.
The Assistant Collector then permitted the petitioner to go and gave him time till May 7, 1955, to produce evidence showing that the goods were imported on payment of customs duty and under a valid import licence.
On the same day, i.e., May 4, 1955, a notice was served on the petitioner by the Customs authorities stating that there were reasonable grounds to believe that the goods seized by the Rummaging Inspector had been illegally imported into India and, therefore, before further action was taken under as.
167(8) and 167(39) of the Sea Customs Act, the petitioner should submit by May 7, 1955, any documents which might be in his possession showing that the goods in question were legally imported into India on payment of proper Customs duty and on production of a valid import trade control licence.
It is also stated that if the goods were not imported by the petitioner, but were bought from another party he should submit by the same date any evidence in his possession showing the purchase of the goods.
In answer to this, on behalf of the petitioner ' Messrs. section K. Sawday and Company, a firm of Advocates, Calcutta, wrote to the Assistant Collector, Customs, on May 7, 1955, reciting the circumstances under which the petitioner came to 1113 be in possession of the seized articles alleging that in the circumstances the presumption of an offence having been committed in contravention of section 86 of the Sea Customs Act attracting a punishment under section 167(39) of the Sea Customs Act was unwarranted and requested to be furnished with a statement of the reasons for the seizure as soon as possible.
The letter went on to request for ten days ' time for procuring and producing certificates etc.
from the Bombay trade and Calcutta trade about the authenticity of the petitioner 's business.
and also how he came to be in possession of the goods.
Another letter was written by the same firm of Advocates on May 9, 1955, the details of which it is unnecessary to refer.
On May 16, 1955, a further letter was written enclosing two certificates and containing further particulars.
This also reiterated the request for the supply of specific reasons for the seizure.
On May 23, 1955, the Assistant Collector replied to the Advocates informing them that the diamonds in question were seized on reasonable suspicions that the same had been imported into India illegally and as such were liable to seizure under the Sea Customs Act.
Further correspondence followed by a letter dated June 20, 1955, to which there was a reply on June 25, 1955, wherein there was a detailed reference to everything that had taken place till then and especially with regard to the earlier denial of the petitioner about there being any diamonds with him and the discovery of the same later on in a used jacket in a wall almirah.
This is a comprehensive letter containing the justification for the proceedings taken by the search officers and finally the Assistant Collector observed that if the petitioner failed to submit a written explanation in time or did not appear before him when the case was fixed for hearing, the case would have to be decided on the basis of the evidence on the record without any further notice; On July 1, 1955, Messrs. section K. Sawday & Company wrote a further letter on behalf of the petitioner reiterating their objections and showing why action should not be taken.
This was followed by letters dated July 4 and 20, 1955.
A personal hearing was granted on July 21, 1955, followed by a letter from the Advocates 143 1114 dated July 22, 1955.
It is unnecessary for the present to elaborate the contents of these letters or to refer to the statement enclosed therewith from M/s. Ratilal Amritlal, Bombay.
The Collector of Customs thereupon, after considering the entire matter placed before him, passed an order dated September 12, 1955, which was dispatched on November 5, 1955, containing an elaborate discussion of the various facts and circumstances and finally concluding that since the petitioner had failed to discharge the onus under section 178 A of the Sea Customs Act in respect of the diamonds seized on May 4, 1955, orders had been passed confiscating the same under sections 167 (8) and 167 (39) of the Sea Customs Act and that the confiscation would be absolute in terms of the provisions of sections 3 (2) and 4 of the Imports and Exports (Control) Act, 1947.
The reasons given in the above order were that the subsequent statements were contrary to what had been stated in the first instance, that at the time of the raid, an attempt was made to hide the diamonds in a suspicious manner and lastly that the petitioner was making statements which were in the nature of an afterthought, and not supported by facts.
On account of these and other reasons the Collector was of the opinion that the presumption under section 178 A had not been rebutted.
The order stated that an appeal against it lay to the Central Board of Revenue within three months of the date of the dispatch and also contained information as to the court fee stamps etc., which would have to be affixed.
Without availing himself of that remedy the petitioner has come up to this Court by way of an application for a writ under article 32 of the Constitution.
Though Mr. Chatterjee faintly argued that the provisions of article 19(1)(f) and (g) and article 31 of the Constitution had been violated, he did not seriously press those contentions.
The main point of the attack was centered on the contention that section 178 A was violative of the principles of equal protection of the laws guaranteed under article 14 of the Constitution.
Before we discuss the validity of section 178 A, it would be useful to consider the circumstances which led to 1115 the enactment of that statutory provision and for that purpose a brief outline of the relevant sections of the Act would be necessary.
Section 19 of the , enables the Central Government by notification in the official Gazette to prohibit or restrict importation or exportation of goods into or out of India, and section 20 enumerates the dutiable goods.
When any person imports goods into India, the owner of such goods is required, after the delivery of the manifest by the master of the vessel in which they are imported, to make an entry of the goods for home consumption or warehousing by delivering to the Customs collector a bill of entry containing particulars which shall correspond with the particulars given of the same goods in the manifest of the ship (section 86).
This is intended to give an idea to the Customs collector as to whether what the owner claims is different or the same as what the master of the vessel has intimated by the delivery of the manifest.
On the delivery of such a bill, if any duty is payable on such goods, the same shall be assessed and it is only after payment of the duty so assessed that the owner may proceed to clear the same (section 87).
Clearance of the goods after the payment of such duty is provided in section 89 and if everything has been done according to law, the owner can take away the goods.
Chapter XVI deals with offences and penalties and section 167 of the same Chapter contains three columns in a schedule, the first of which mentions the offence, the ,second, which does not have the force of law, gives the section of the Act to which the offence has reference and the third lays down the penalty which may be imposed.
With regard to the third column a distinction has to be made between the penalty to be imposed by the customs authorities and the. punishment that can be imposed by a court of law for the infringement of certain provisions.
Offences mentioned in entries Nos. 26, 72 and 74 to 76 (both inclusive) have reference to prosecution and conviction before a Magistrate, whereas most of the others concern penalties imposed by the Customs authorities.
This distinction will be important when referring to section 182.
We are in this 1116 case concerned with entries Nos. 8 and 39.
The penalty of confiscation is provided in the third column of entry No. 8, if any goods, the importation or exportation of which is prohibited or restricted, are imported contrary to such prohibition or restriction.
It lays down that in addition to the confiscation of the goods, the persons concerned shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees.
This Court has held that the minimum is the alternative: see Maqbool Hussain vs The State of Bombay(1).
Entry No. 39 also provides for a penalty not exceeding Rs. 500 and the confiscation of the goods if they are taken or passed out of any custom house or wharf without an entry duly made.
Smuggled goods when traced and seized come under this category.
Though the word 'smuggling ' is not defined in the Act, it must be understood as having the ordinary dictionary meaning namely carrying of goods clandestinely into a country.
Chapter XVII relates to searchers and recovery of smuggled goods, as well as offences, appeals, etc.
Section 169 gives power to any customs officer, duly employed in the prevention of smuggling, to search any person on board of any vessel in any part in (India) or any person who has landed from any vessel, provided that such officer has reason to believe that such person has dutiable or prohibited goods secreted about his person.
A safeguard is provided under section 170 by which any person about to be searched may require the said officer to take him, previous to search, before the nearest Magistrate or Customs collector.
The important factor in this case is that the person making the search or attempting to do it must have a reason to believe that such person has dutiable or prohibited goods.
These two sections refer to the time at which a person brings dutiable goods into India but the later provisions of the Chapter lay down the procedure to be followed where goods have been smuggled without being detected at the port or the wharf.
Power to issue search warrants is given to any Magistrate under section 172 which is to the following effect: (1) ; ,742. 1117 " Any Magistrate may, on application by a Customs collector, stating his belief that dutiable or prohibited goods (or any documents relating to such goods) are secreted in any place within the local limits of the jurisdiction of such Magistrate, issue a warrant to search for such goods (or documents).
Such warrant shall be executed in the same way, and shall have the same effect, as a search warrant issued under the law relating to Criminal Procedure.
" The warrant, as will be noticed, may be issued only on the application of a Customs collector who is a responsible senior officer and that is certainly a safeguard against indiscriminate issue of search warrants.
Section 178 speaks of the seizure of goods liable to confiscation in any place either upon land or water by any officer of customs or any other person duly employed for the prevention of smuggling.
The impugned section 178 A comes next which is quoted below: " 178 A (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, cigarettes and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf.
" The presumption under section 178 A is equally applicable to seizure as a result of a search warrant under section 172 or seizure made under section 178.
How the things seized are to be dealt with can be seen from section 179, and section 181 lays down that when a seizure or arrest is made, a statement in writing of the reasons therefor should be given to the person who is arrested or from whom goods are seized.
When an article is seized under sections 172 and 178, except in cases falling under entries Nos. 26, 72 and 74 to 76 of section 167, the confiscation or penalty or duty may be adjudged by the officer mentioned therein, i.e., the person from whom the articles are seized is entitled to an adjudication 1118 regarding either confiscation or penalty or duty.
This gives the valuable right of having the adjudication of the claim made by a superior officer, and despite such adjudication if the confiscation is still made, under section 188 an appeal lies from the subordinate to the Chief Customs authority within three months from the date of such a decision.
In the present case the confiscation was made by the Collector of Customs and an appeal lay from him to the Central Board of Revenue.
Section 191 enables the Central Government on the application of any person aggrieved by any decision or order passed under this Act by an officer of Customs or Chief Customs authority and from which no appeal lies, to reverse or modify such decision or order.
The outline of the various provisions above made shows that successive remedies are provided to an aggrieved person from whom articles have been seized and confiscated and the Act is a complete Code in itself affording redress and relief in case of illegal or unjustified orders.
The genesis of section 178 A may now be considered.
The Central Government had appointed a commission known as the Taxation Enquiry Commission which by its report recommended the adoption of the principles underlying section 178 A in order to minimize smuggling.
In Vol.
II of their report, Chapter VII deals with administrative problems in regard to customs and Excise duties.
At pp.
320 and 321 the Committee recommends the amendment of the , firstly to make smuggling a criminal offence and secondly empowering Customs officers to search premises etc.
and the third recommendation is the one with which we are concerned.
It is in the following terms: "To transfer the onus of proof in respect of offences relating to smuggling to the person in whose possession any dutiable, restricted or prohibited goods are found.
" It is to implement this recommendation that section 178 A has been enacted.
Section 178 A applies to diamonds and other precious stones and there has been no dispute about 1119 the application of this provision to the present case.
On the facts mentioned above it is clear that the seizure has been under the Act in the reasonable belief of the Customs authorities that they are smuggled goods and, therefore, the burden of proving that they are not smuggled goods has been cast by this section on the persons from whose possession the goods are seized.
No doubt the content and import of the section are very wide.
It applies not only to the actual smuggler from whose possession the goods are seized but also to those who came into possession of the goods after having purchased the same after the same has passed through many hands or agencies.
For example, if the Customs authorities have a reasonable belief that certain goods in the possession of an innocent party are smuggled goods and the same is seized under the provisions of this Act, then the person from whose possession the goods were seized, however innocent he may be, has to prove that the goods are not smuggled articles.
This is no doubt a very heavy and onerous duty cast on an innocent possessor who, for aught one knows, may have bona fide paid adequate consideration for the purchase of the articles without knowing that the same has been smuggled.
The only pre requisite for the application of the section is the subjectivity of the Customs officer in having a reasonable belief that the goods are smuggled.
A careful examination of the contents of the somewhat lengthy petition under article 32 of the Constitution does not show how the impugned section offends article 14, and no distinct and separate ground is taken about its unconstitutionality, but Mr. Chatterjee argues that the burden of proof enunciated therein is opposed to fundamental principles of natural justice, as it gives an unrestricted arbitrary and naked power to the customs authorities without laying down any standard or norm to be followed for exercising powers under the section.
What is urged is that whereas under the ordinary law the burden of proof in matters like this is on the party who sets up a particular case, under the section that process is inverted and the 1120 burden is cast on the possessor of the article to show that it was imported into India with a proper bill of entry and after paying the proper custom duty due.
As stated already, it is a heavy burden to be laid upon the shoulders of an innocent purchaser who might have come into possession after the article has changed many hands and this, it is alleged, invokes discrimination between him and other litigants and deprives him of the equal protection of the law guaranteed by article 14 of the Constitution.
A large number of cases have been cited at the Bar in support of the respective contentions of the parties.
The true nature, scope and effect of article 14 of the Constitution have been explained by different constitutional Benches of this Court in a number of cases, namely, Chiranjit Lal Chowdhury vs The Union of India and Others(1), The State of Bombay and Another vs F. N. Balsara(2), The State of West Bengal vs Anwar Ali Sarkar(3), Kathi Raning Rawat vs The State of Saurashtra(4), Lachmandas Kewalram Ahua and another vs The State of Bombay (5), Syed Qasim Razvi vs The State of Hyderabad and Others(6) , Habeeb Mohammad vs The State of Hyderabad(6) and V. M.
Syed Mohammed and Company vs The State of Andhra(7), but it will not be necessary for us to enter upon a lengthy discussion of the matter or to refer to passages in those judgments, for the principles underlying the provisions of the Article have been summarised by a Full Bench of this Court in Budhan Chaudhury and Others vs The State of Bihar(9) in the following terms: "It is now well established that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation.
In order, however, to pass the test of per omissible classification two conditions must be fulfilled, namely (1) that the classification must be founded on an intelligible differential which distinguishes persons or things that (1) ; , (2) ; (3) ; (4) ; (5) ; (6) (7) ; (8) ; (9) ; at p. 1048 1049.
1121 are grouped together from others left out of the group and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question.
The classification may be founded on different bases, namely, geographical or according to objects or occupations or the like.
What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration.
It is also well established by the decisions of this Court that article 14 condemns discrimination not only by a substantive law but also by a law of procedure.
" The principle thus enunciated has been adopted and applied by this Court in Purshottam Govindji Halai vs Shri B. M. Desai (1) and in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti and another (2).
Mr. N. C. Chatterjee appearing for the petitioner has referred us to several decisions of the Supreme Court of America, such as William N. McFerland vs American Sugar Refining Co. (3), W. D. Manley vs State of Georgia (4) and Tot vs United States(5).
It appears to us that these decisions really turn upon the due process clause of the American Federal Constitution and cannot help in the construction of the equal protection clause of our Constitution.
The contentions urged by Mr. Chatterjee as to the unconstitutionality of section 178 A of the , will, therefore, have to be tested in the light of the principles laid down by this Court in Budhan Chowdhury 's case (supra).
A cursory perusal of section 178 A will at once disclose the well defined classification of goods based on an intelligible differentia.
It applies only to certain goods described in sub section
(2) which are or can be easily smuggled.
The, section applies only to those goods of the specified kind which have been seized under the Act and in the reasonable belief that they are (1) , 898 899.
(2) [1955] 2 S C.R. 1996, 1229.
(3) ; ; (4) (1929) 279 U.S.I; ; (5) ; 144 1122 smuggled goods.
It is only those goods which answer the threefold description that come under the operation of the section.
The object of the Act is to prevent smuggling.
The differentia on the basis.
of which the goods have been classified and the presumption raised by the section obviously have a rational relation to the object sought to be achieved by the Act.
The presumption only attaches to goods of the description mentioned in the section and it directly furthers the object of the Act, namely, the prevention of smuggling, and that being the position the impugned section is clearly within the principle enunciated above, not hit by article 14.
The impugned section cannot be struck down on the infirmity either of discrimination or illegal classification.
Confining as it does to certain classes of goods seized by the customs authorities on the reasonable belief that they are smuggled goods, there is only a presumption which can be rebutted.
In these circumstances, there can be no doubt whatever that section 178 A does not offend article 14 of the Constitution and this petition is, therefore, to be dismissed with costs.
Petition dismissed. | Section 178 A of the Sea Customs Act which places the burden of proving that any of the goods mentioned in the section and reasonably believed to be smuggled are not really so on the person from whose possession they are seized, is not discriminative in character and does not violate equal protection of law guaranteed by article 14 Of the Constitution.
Budhan Chaudhury and Others vs The State of Bihar, (1955) I S.C.R. 1045, applied.
Purshottam Govindji Halai vs Shri B. M. Desai, and A. Thangal Kunju, Musaliar vs M. Venkitachalam Potti and another (1955) 2 S.C.R. ii96, referred to.
1111 William N. McFeyland vs American Sugar Refining Co., ; , W. D. Manley vs State of Georgia, (1929) 279 U.S. I and Tot vs United States, , held inapplicable.
Consequently, in a case where the Collector of Customs on the failure of a person, from whose possession certain diamond pieces were seized, to prove that they were not smuggled goods but were legally imported into India, confiscated the diamonds under sections 167(8) and 167(39) Of the Sea Customs Act, no violation of the fundamental right conferred by article 14, Of the Constitution occurred. |
Appeal No. 1948 of 1966.
Appeal from the judgment and decree dated March 22, 1965 of the Gujarat High Court in First Appeal No. 718 of 1960.
Purshottam Trikamdas, M.H. Chhatrapati and A.K. Varma, for the appellant.
G.L. Sanghi, Urmila Kapur and S.P. Nayar, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
The appellant was the owner of land bearing survey No. 910 situated on the Bhachau Rahapur Road in Kutch District.
In November 1949 the Government of Kutch took possession of the land under an arrangement that the Government would give to the appellant in exchange other suitable lands of equal value.
On that date Kutch was part of the territory of India and the Land Acquisition, Act, 1894 was in force there.
After taking possession of the land the Government constructed thereon the State Guest House and the Court House.
Thereafter the Government was neither willing to return the land nor to give other suitable land in exchange and instead it decided to acquire the land compulsorily.
On February 1, 1955 the Government issued a notification under sec.
6 (1 ) of the Land Acquisition Act declaring that the land was needed for public purposes stating that possession of the land had already been taken over and directing the Collector to take action under sec.
The necessary action was duly taken and in due course the Collector made his award on April 22, 1957.
The appellant objected to the amount of compensation and asked the Collector to make a reference to the Court under sec.
The Collector duly made the reference.
At the hearing of the reference before the District Judge, Kutch, the Government conceded that the appellant was entitled to the market value of the land as on February 1, 1955.
The District Judge awarded compensation accordingly.
The Government filed an appeal in the High Court.
At the hearing of the appeal the Government contended that in the absence of a notification under sec. 4( 1 ), no compensation could be awarded to the appellant.
The High Court accepted the contention and observed that the appellant would be at liberty to contend in other proceed 62 ings that the acquisition was bad in the absence of a notification under sec.
4( 1 ).
In this view of the matter the High Court allowed the appeal and set aside the order of the District Judge.
The present appeal has been filed after obtaining a certificate from the High Court.
The main question arising in this appeal is whether the Government can take up inconsistent positions in Court at successive stages of the same litigation to the detriment of its opponent and whether having conceded before the District Judge that the appellant was entitled to the market value of the land on February 1, 1955 it could at the appellate stage resile from that position and contend that there was no notification under sec.
4(1) on that date and that consequently its opponent was not entitled to any compensation.
The scheme of the Land Acquisition Act is well known.
If the Government desires to acquire land, it has to issue a preliminary notification under sec.
4( 1 ) declaring that the land is needed or is likely to be needed for any public purpose.
This notification has to, be issued in order to give an opportunity to all persons interested in the land under section 5A( 1 ) to object to the acquisition within 30 days after the issue of the notification.
After hearing the objections the Collector has to make a report under sec.
5A(2).
On considering this report the Government may issue a notification under sec.
6 (1 ) declaring that the land is needed for a public purpose.
In cases covered by see.
17(4) the Government may direct that the provisions of sec.
5A shall not apply and if it does so a declaration may be made under sec.
6( 1 ) at any time after the publication of the notification under sec.
4 (1 ).
When the Collector has made an award under sec.
11, he may under see.
16 take possession of the land which thereupon vests in the Government.
Section 18 requires the Collector to make a reference to Court on the application of any person interested in the land who has not accepted the award.
It is the market value of the land at the date of the publication of the notification under sec.
4( 1 ) that can be awarded as compensation by the Collector under sec.
11 and by the Court under sec.
These provisions show that the issue of the notification under sec.
4(1) is a condition precedent to the acquisition of the land.
Where the procedure under sec.
5A has to.
be followed, there must necessarily be an interval of time between the issue of the notification under sec.
4(1) and the notification under sec.
But where sec.
5A does not stand in the way, the prior publication of a notification under 4( 1 ) is not a condition precedent to the publication of a notification under sec.
6( 1 ).
For this reason this Court held in Somavanti vs State of Punjab(1) that where an order was passed [1963] 2, S.C.R. 775, 821 823. 63 under sec.
17(4) dispensing with the procedure Under sec.
5A, it was lawful for the Government to publish both the notifications on the same date.
The procedure under sec.
5A being entirely for the benefit of the persons interested in the land they may waive it, see Toronto Vol.
36, p. 444: "A statutory right which is granted a privilege may be waived either altogether or in a particular case.
" If all persons interested in the land waive the benefit of the procedure under sec.
5A the Government may lawfully issue a composite notification under secs.
4 ( 1 ) and 6 ( 1 ).
In this background let us examine ,the facts of the present case.
The Government having constructed buildings on the land was not in a position to restore it and had: no option but to acquire it compulsorily.
With a view to make the acquisition the Government published a notification under sec.
6( 1 ) on February 1, 1955.
On finding that there was no separate notification under sec.
4( 1 ) the Government had a choice between two courses of conduct.
It could say that in the absence of such a notification the acquisition was invalid and that no compensation could be awarded under sec.
If it did so it would be compelled to start fresh acquisition proceedings and pay a larger sum by way of compensation.
The other course was to treat the notification of February 1, 1955 as.
a composite one under secs.
4(1) and 6(1) with the consent of the appellant and to say that the market value of the land on that day could be awarded by way of compensation.
The Government elected to choose the latter course.
At the hearing of the reference, it conceded that the appellant was entitled to the market value of the land on February 1, 1955.
The appellant agreed to accept compensation on that footing.
Having regard to the consent of both parties, it could properly be assumed that the procedure of section 5A had1 been waived by the appellant and that the notification of February 1, 1955 could be treated as a composite one under sections 4 ( 1 ) and 6 ( 1 ).
The District Judge could therefore lawfully award the market value of the land that day.
Relying on the concession made by the Government, the appellant acted to its detriment.
It did not challenge the acquisition and took no steps to recover the land.
The result is that the Government has been in adverse possession of the land for more than 12 years since 1949 and has gained an advantage which it could not otherwise obtain.
In these.circumstances the Government cannot be permitted to resile from the election which it deliberately made and to say that the appellant is not entitled to the market value of the land on February 1, 1955.
A party litigant cannot be permitted to take up inconsistent positions in (1) 64 Court to the deteriment of his opponents [see Rama Charan Chakrabarty vs Nimai Mondal(1), Bigelow on Estoppel, 6th ed., page 783].
He cannot approbate or reprobate (see Halsbury 's Laws of England, 3rd, ed., vol.
15 article 340).
The concession cannot now be retracted.
The High Court should have disposed of the appeal before it on the footing that the appellant is entitled to the market value of the land on February 1, 1955.
As the High Court did not hear the appeal on the merits, the matter must be remanded to it for final disposal.
In the result, the appeal is allowed, the order of the High Court is set aside and the matter is remanded to the High Court for disposal on the merits.
The respondent shall pay to the appellant the costs of the appeal in this Court.
R.K.P.S. Appeal allowed.
(1) 15 C.L.J. 58. | In 1949 the Government took possession of certain land belonging to the appellant under an arrangement whereby the Government was to give to the appellant in exchange other suitable lands of equal value.
After the Government had constructed some buildings on the land, it decided to acquire the land compulsorily.
On February 1, 1959, the .Government issued a notification under section 6(1) of the Land Acquisition Act, 1894, declaring that the land was needed for public purposes and stating that possession of the land had already been taken.
The Collector made an award on April 22, 1957 but the appellant objected to the amount of compensation and the Collector, on his application, made a reference to the Court under section 18.
At the hearing of the reference before the District Judge, the Government concluded that the appellant was entitled to the market value of the land as on February 1, 1955 and the District Judge awarded compensation accordingly.
Thereafter the Government filed an appeal in the High Court and contended that in the absence of a notification under section 4(1); no compensation could be awarded to the appellant.
The High Court allowed the appeal and set aside the order of the District Judge.
On appeal to this Court, HELD: Allowing the appeal: The Government having constructed buildings on the land was not in a position to restore it and had no option but to acquire it compulsorily.
With a view to make the acquisition the Government published a notification under sec.
6(1) on February 1, 1955.
On finding that there was no separate notification under sec.
4(1) the Government had a choice between two courses.
It could say that in the absence of such a notification the acquisition was invalid and that no compensation could be awarded under sec.
If it did so it would be compelled to start fresh acquisition proceedings and pay a larger sum by way of compensation.
The other course was to treat the notification of February 1, 1955 as a composite one under sections 4(1) and 6(1) with the consent of the appellant and to say that the market value of the land on that day could be awarded by way of compensation.
The Government elected to choose the letter course and the appellant agreed to accept compensation on that footing.
Having regard to the consent of both parties, it could properly be assumed that the procedure of section 5A had been waived by the appellant and that the notification of February 1, 1955 could be treated as a composite one under sections 4(1) and 6(1).
The District Judge could therefore lawfully award the market value of the land on that day.
[63 C G] Somavanti.
vs State of Punjab, , 821 823 and Toronto Corpr.
vs Russell, ; referred to.
61 Furthermore, relying on the concession made by the Government the appellant had acted to its detriment in that it did not challenge the acquisition and the Government had come to be in adverse possession of the land for more than 12 years.
In these circumstances the Government could not be permitted to resile from the election which it deliberately made and to say that the appellant was not entitled to the market value of the land on February 1, 1955.
[63 G H] Rama Charan Chakrabarty vs Nimai Mondal, 15 C.L.J. 58; referred to, |
Civil Appeal No. 14 of 1968.
Appeal from the judgment and decree, dated December 12, 1964 of the Allahabad High Court in F.A.F.O. No. 401 of 1963.
R.M. Hazarnavis, K.L. Hathi and Atiqur Rehman, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
By a contract, dated March 8, 1945, the appellant agreed to supply meat to the Government of India.
The contract contained an arbitration clause for reference of disputes arising out of the contract to the officer named in the contract.
The appellant claims that a sum of Rs. 8,38,994/10/6/ is due to him in respect of the supplies of meat made by him during the period between April 1, 1945 and March 31, 1946.
He made representations to.
the Government for payment and for arbitration of the disputes.
On or about July 10, 1958 the Government refused to.
refer the matter to.
arbitration.
On July 11, 1961 the appellant filed an application in the Court of the District Judge, Jhansi, under sections 8 and 20 of the for filing the arbitration agreement and for an order of reference of the disputes to an arbitrator appointed by the Court.
The respondent contended that the application was barred by limitation.
The District Judge allowed the application.
He held that there was no period of limitation for making an application under sections 8 and 20.
The defendant filed an appeal against the order.
The High Court dismissed the appeal as incompetent in so far as it challenged the order under section 8, and allowed it in so far as it challenged the order under section 20.
The High Court held that the application was governed by article 181 of the Indian Limitation Act, 1908 and was barred by limitation as it was made more than three years after the disputes had arisen.
The appellant has filed this appeal after obtaining a certificate from the High Court.
The point in issue is whether an application under section 20 of the is governed by article 181 of the Indian L2Sup.
CI 69 16 234 Limitation Act.
Since the decision in Bai Manekbai vs Manekli Kavasji(1) it is well settled that the operation of article 181 is limited to applications under the Code of Civil Procedure.
In that case Westropp, C.J. after referring to the corresponding article 178 in the second schedule to the Limitation Act of 1877 observed: "An examination of all the other articles in the second schedule relating to "applications", that is to say of the Third division of that schedule, shows that the applications therein contemplated are such as are made under the Code of Civil Procedure.
Hence it is natural to conclude that the applications referred to in Article 178 are applications ejusdem generis, i.e., applications under the Code of Civil Procedure.
The preamble of the Act, moreover, purports to deal with 'certain applications ' only, and not with all applications.
" This decision was followed in numerous cases and was approved in Hansraj Gupta vs Official Liquidator Dehra Dun, Mussourie Electric Tramway Company(2).
Having regard to these decisions, Das, J. said in Shah Mulchand & Co., vs Jawahar Mills Ltd. (3): "This long catena of decisions may well be said to have as it were, added the word 'under the Code ' in the first column of that Article=." The Court held that the amendment of articles 15 8 and 178 and the insertion of the words "under the " in place of the words "under the Code of Civil Procedure, 1908" did not alter the settled meaning of article 181.
To the same effect is the decision in Bombay Gas Ca.: vs Gopal Bhiva.(4) Following these decisions the Court held in Wazirchand Mahajan & Anr.
vs Union of India(5) that an application under section 20 of the not being an application under the Code of Civil Procedure was not governed by article 181.
The High Court has come to the conclusion that an application under section 20 of the is governed by article 181 for the following reasons: Article 181 should be construed as if the words "under the Code" were added in it.
The repealed paragraph 17 of the second schedule to the Code and re enacted it in section 20 with minor modifications.
That being so, section 8(1) of the applied and the implied reference in article 181 to paragraph 17 of the second schedule to the Code should be construed as a reference to section 20 of the .
No different intention is to be found in the and there is nothing to indi (1) Bom.
213, 214.
(2) [1933] L.R. 60 I.A.13, 20.
(3) ; ,371.
(4) ; (5) ; 235 cate that an application under section 20 can be made at any time without any limitation.
The argument that the implied reference in article 181 to paragraph 17 of the second schedule to the Code should be construed as a reference to section 20 of the and not raised and considered in Wazirchand Mahalan 's case(1).
It is, therefore, our duty to examine this contention.
Section 8 (1) of the corresponds to the Interpretation Act, 1889 (52 & 53 vict.
c. 63) and runs as follows: "Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals and re enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed, shall, unless a different intention appears, be construed as references to the provision so reenacted.
" The section embodies the rule of construction that where the provision of an Act is repealed and re enacted with or without modification, a reference to the repealed provision in any other enactment should be regarded as a reference to the provision re enacted in the new form unless it appears that the legislature had a different intention.
The was passed with a view to consolidate and amend the law relating to arbitration.
Formerly the general law relating to arbitration was to be found in the Indian Arbitration Act, 1899 and the Code of Civil Procedure, 1908.
Paragraphs 1 to 16 of the second schedule to the Code applied to all arbitrations in suits.
As to arbitrations otherwise than in suits, the Indian Arbitration Act, 1899 applied to cases where, if the subject matter submitted to arbitration were the subject of a suit, the suit could be instituted in a Presidency town; in other cases, the Code of Civil Procedure, 1908 applied The repealed both the enactments.
It extends to the whole of India except the State of Jammu and Kashmir, and save as provided in section 47 applies to all arbitrations.
As to the provisions of the new Act under which applications can be made to Court, sections 8, 14, 16, 28 and 30, correspond to provisions which are found in both the repealed enactments, sections 5 and 9 correspond to similar provisions in the Indian Arbitration Act, 1899, and sections 15 and 20 correspond to similar provisions in the second schedule to the Code and some sections such as sec.
11, are entirely new.
In the circumstances, a question may arise whether the provisions of the new Act can be regarded as reenactments of the repeated provisions of the Indian Arbitration Act, 1899 or of the Code.
But for the purpose of this case we shall ,assume that section 20 of the new Act is a re enactment with (1) ; 236 modification of paragraph 17 of the second schedule to the Code.
We shall also assume that article 181 of the Limitation Act as construed by the Courts should be regarded as containing a reference to the Code of Civil procedure including paragraph 17 of the second schedule thereof.
Even after making those two assumptions it appears to us that the implied reference in article 181 to the Code of Civil Procedure cannot be construed as a reference to the .
Before their amendment by the Indian , article 158 of the Limitation Act applied to applications "under the Code of Civil Procedure, 1908 to set aside an award" and article 178 applied to applications.
"under the same Code for the filing in Court of an award".
The amended articles 158 and 178.
The amended article 158 applies to applications "under the to set aside an award or to get an award remitted for consideration", that is to say, to application under sections 16 and 30 of the Act.
The amended article 178 applies to applications "under the for the filing in Court of an award", that is to say to applications under section 14 of the Act.
In amending articles 158 and 178 the legislature acted upon the view that the references to the Code of Civil Procedure, 1908 in the second schedule t9 the Limitation Act could not in the absence of the amendment be construed as references to.
At the same time the legislature refrained from amending article 181 and providing that the article will apply to other applications under the .
It is manifest that the legislature intended that save as provided in articles 158 and 178 there would not be any limitation for other applications under the Act, Take the case of an application under section 28 of the Act for enlargement of the time for making the award.
A similar application under paragraph 8 of the second schedule to the Code was governed by article 181,but a like application under section 12 of the Indian Arbitration Act,1899 was not subject to any period of limitation.
There is nothing to indicate that for the purpose of limitation section 20 of the new Act should be regarded as a re enactment of the corresponding provision of the.
Code and not of the Indian Arbitration Act, 1899.
An application under section 8 of the new Act corresponding to paragraph 5 of the second schedule to the Code and section 8 of the Indian Arbitration Act, 1899 stand on the same footing.
In the circumstances, it is not possible to construe the implied reference in article 181 to the Code of Civil Procedure as a reference to the , or to hold that article 181 applies to applications under that Act.
The rule of construction given in section 8 (1) of the cannot be applied, as it appears that the legislature had a different intention.
It follows that an application under sections 8 and 20 of the is not 237 governed by article 181.
The Limitation Act does not prescribe any period of limitation for such an application.
It follows that the present application under sections 8 and 20 is not barred by limitation.
In conclusion we must observe that the appellant 's claim relates to supplies during the period between April 1, 1945 and March 31, 1946.
There is a serious contention whether the claim is barred by limitation.
It will be the duty of the arbitrator to consider this matter carefully and to decide whether or not the claim is so barred.
In the result, the appeal is allowed, the order of the High Court is set aside and the order of the District.
Judge, Jhansi, is restored.
In the circumstances of the case, there will be no order as to costs in this Court.
G.C. Appeal allowed. | The appellant entered into a contract with the Government of India.
The contract contained an arbitration clause.
For certain supplies made under the contract the appellant made representations to the Government or payment and for arbitration of disputes.
On or about July 10, 1958 Government refused to refer the matter for arbitration.
On July 11, 1961 the appellant flied an application in the Court of the District Judge under sections 8 and 20 of the , for filing the arbitration agreement and for an order of reference of the disputes to an arbitrator appointed by the court.
The respondent contended that the application was barred by Limitation.
The District Judge allowed the application, holding that there was no limitation for making an application under sections 8 and 20.
The defendant 's appeal was dismissed by the High Court as incompetent in so far as it challenged the order under section 8 but was allowed in so far as it challenged the order under section 20.
The High Court held that an application under section 20 is governed 'by article 181 of the Indian Limitation Act, 1908.
In coming to this conclusion the High Court took into account the settled judicial view that the.
operation of article 181 is limited to applications under the Code of Civil Procedure.
and reasoned as follows: Article 181 should be construed as if the words 'under the Code ' were added in it.
The repealed paragraph 17 of the second schedule to the Code and re enacted it in section 70 with minor modifications.
That being so section 8(1) of the applied and the implied reference in article 181 to paragraph 17 of the second schedule to the Code should be construed as a reference to section 20 of the .
Appeal against the High Court 's judgment was filed with certificate.
HELD: The 'appeal must be allowed.
By the the Legislature amended articles 158 and 178 of the Limitation Act and made them applicable to the relevant proceedings under the but no similar change was made in article 181.
It is manifest that save as provided in articles 158 and 178 there would not be any limitation for other applications under the Act.
Further there is nothing to indicate that for the purpose of limitation section 20 of the 1940 Act should be regarded as a re enactment of the corresponding provision of the Code and not of the Indian Arbitration Act, 1899.
[236 D G] In the circumstances it is not possible to construe the implied reference in article 181 to the Code of Civil Procedure as a reference to the or to hold that article 181 applies to applications under that Act.
The rule of construction given in section 8(1)of the cannot be applied, as it appears that the legislature had a 233 different intention.
It follows that an application under sections 8 and 20 of the is not governed by article 181.
The Limitation Act does not prescribe any period of limitation for such an application.
[236 G H] The present application under sections 8 and 20 was therefore not barred by limitation.
[237 A] Bai Manekbai vs Manekji Kavasji, Born.
213, 214 Hansraj Gupta vs Official Liquidator Dehra Dun Mussourie Electric Tramway Company, (1933) L.R. 60 I.A. 13, 20, Shah Mulchand & Co. vs Jawahar Mills Ltd. ; , 371, Bombay Gas Co. vs Gopal Bhiva, ; and Wazirchand Mahajan & Anr.
vs Union of India, ; , referred |
Civil Appeal No. 793 of 1966.
Appeal by special leave from the judgment and order dated August 21, 1964 of the Bombay High Court, Nagpur Bench in Special Civil Application No. 353 of 1963.
M.N. Phadke, Naunit Lal and B.P. Singh, for the appellant.
D.D. Verma and Ganpat Rai, for respondent No. 1.
The Judgment of the Court was delivered by Shelat, J.
This appeal, by special leave, is directed against the order of the High Court of Bombay (Nagpur Bench) which set aside the orders of the Assistant Commissioner of Labour and the Industrial Court, Nagpur and remanded the case to the Assistant Commissioner.
The appellant firm conducts a number of bidi factories at various places in Vidharba including the one at Kamptee.
Its head office is also situate there.
The factory at Kamptee and the head office have always been treated as separate entities though owned by the same firm.
Consequently, the head office was registered under the Central Provinces & Berar Shops and Establishment Act, 1947 and the factory at Kamptee was registered under the Factories Act.
The factory has also its own standing orders certified under the Central Provinces & Berar Industrial Disputes Settlement Act, 1947.
Respondent 1 was originally employed in the factory at Kamptee.
Two or three years thereafter he was directed to work at the head office and worked therein for about six years prior to the impugned order of dismissal passed against him by the munim of the head office.
Aggrieved by the order he flied 274 an application under section 16 of the C.P. & Berar Industrial Disputes Settlement Act alleging that the said order was incompetent and illegal.
The appellant firm contended that at the material time Respondent 1 was employed as a clerk in the head office, that the head office was a separate entity, that the dismissal order had not been passed 'by the appellant firm as the owner of the said factory, that the firm, as such owner, was wrongly impleaded and that the application was misconceived.
The Assistant Commissioner dismissed the application holding that Respondent 1 at the material time was not the employee in the factory, but was employed in the firm 's head office.
He relied on the fact that the head office and the factory had separate rules, that Respondent 1 used to sign his attendance in the register of the head office, that he was being paid his salary by the head office, and lastly, that his name was not on the muster roll of the factory.
He also found that whereas the staff of the head office was governed by the C.P. & Berar Shops & Establishments Act, the factory was governed by the C.P. & Berar Industrial Disputes Settlement Act.
Against the dismissal of his ,application, Respondent 1 filed a revision application before the Industrial Court, Nagpur.
The Industrial dismissed the application holding that the only question raised before it was whether Respondent 1 was the employee of the head office and that that being purely a question of fact, he could not interfere with the finding of fact arrived at by the Assistant Commissioner.
Respondent 1 thereafter filed a writ petition in the High Court challenging the said orders.
The High Court held that it was possible in law for an employer to have various establishments where different kinds of work would be done, in which case an employee in one establishment would be liable to be transferred to another establishment.
But the High Court observed that unless it was established that the employment of Respondent 1 in the factory was legally terminated it could not be assumed, merely because he was directed to work in the head office, that his employment was changed and the head office was substituted as his employer in place of the said factory.
As the order passed by the Assistant Commissioner was not clear on this question, the High Court remanded the case for disposal according to law.
Mr. Phadke for the appellants, raised the following contentions against the High Court 's order: (1) that the High Court made out a new case for Respondent 1, in that Respondent 1 had never challenged the validity of the order of dismissal on the ground that there was no change of employment, and that therefore, the head office was incompetent to order his dismissal, (2) that the facts of the case justified the conclusion that Respondent 1 had ceased to be the employee of the factory, and (3) that in any event he must be held to have given an implied consent to 275 his being treated as the employee of the head office.
In support of these contentions he relied upon the fact that Respondent 1 had worked at the.
head office for the last six years without any protest, that his name was on the attendance register of the head office, that it was the head office which paid his salary, and lastly, that he worked in the head office under the direction and control of the munim of that office.
As to the first contention, it would not be correct to say that the High Court made out a new case for the first time for Respondent 1 which was not pleaded by him before the Assistant Commissioner.
In para 1 of his application he had expressly averred that about three years after his employment in the factory he had been ordered to work in the head office.
In reply to the application the appellants conceded that though Respondent 1 was first employed in the factory and had worked there for about three years, he had thereafter been transferred to and been working as a clerk in the head office.
There was, however, no averment in that reply that the contract of service of Respondent 1 with the said factory was at any time put an end to or that when he was directed to work in the head office a fresh contract of service was entered into.
between.
him and the head office.
The Assistant Commissioner in his said order held that the head office and the factory were two separate establishments registered under two different Acts, and, therefore, subject to different provisions of law.
He further held that since Respondent 1 was not actually working in the factory and his name did not figure in the factory 's muster roll and was not paid his wages by the factory, the applicant could not be said to be an employee of the said factory.
In his revision application before the Industrial Court, Respondent 1 made an express plea that when he was directed to work in the head office, he had received no notice from the factory that his services were terminated there or that he had henceforth become the employee of the head office.
It is clear from these pleadings that it was not for the first time in the High Court that Respondent 1 contended as to the incompetence of the head office to take disciplinary action against him and to pass the order of dismissal.
The first contention of Mr. Phadke, therefore, cannot be accepted.
As regards the second and the third contentions, there is no dispute that though the head office and the said factory belong to the same proprietors, they were always treated as two distinct entities registered under two different Acts, that Respondent 1 was employed first in the factory where he worked for 2 or 3 years and was thereafter ordered to work at the head office where admittedly he worked for about six years before the impugned order terminating his services was passed.
The question, therefore, which the Assistant Commissioner and the Industrial Court had to decide, in view of the pleadings of the parties, was whether 276 Respondent 1 had ceased to be the employee of the factory and was in the employment of the head office at the time when the impugned order was passed, or whether his services were simply lent to the head office and he continued all along to be the employee of the factory ? The general rule in respect of relationship of master and servant is that a subsisting contract of service with one master is a bar to service with any other master unless the contract otherwise provides or the master consents.
A contract of employment involving personal service is incapable of transfer.
Thus, where a businessman joins a partnership firm and takes his personal staff with him into the firm, his staff cannot be made the staff of the firm without the consent of the other partners.
Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd.(1).
In certain cases, however, it is.
possible to say that an employee has different .employers, as when the employer, in pursuance of a contract between him and a third party, lends or hires out the services of his employee to that third party for a particular work.
Such an arrangement, however, does not effect a transfer of the contract of service between the employer and his employee, but only amounts to a transfer of the benefit of his services.
Century Insurance Co. Ltd. vs Northern Ireland Road Transport Board(").
In such cases where a third party engages another person 's employee it is the general employer who is normally liable for the tortuous acts committed by the employee and his liability is not affected by the existence of a contract between him and the third party under which the services of the employee are lent or hired out for a temporary period to such third party.
In order to absolve the employer from the liability and to make the person who.
temporarily engages the employee or hires his services it is necessary to prove that the relationship of master and servant was temporarily constituted between such third party and the employee, and that it existed at the time when the tortuous act was committed by the employee.
There is, however, a presumption against there being such a transfer of an employee as to make the hirer or the person on whose behalf the employee is temporarily working and a heavy burden rests on the party seeking to establish that the relationship of master and servant has been constituted pro hac vice between the temporary employer and the employee of.
Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd.(1).
In cases where an employer has hired out or lent the services of his employee for a specific work and such an employee has caused damage to another person by his tortuous act, the question often arises as to who of the two, i.e. the employer or the person to whom such services are hired out or lent, is ; at 17.
(2) ; 277 vicariously responsible for such damage.
In cases commonly known as cranes and carriage cases, courts in England evolved the rule of the employee being temporarily the employee of such third party to impose the responsibility on him if it was established that in the matter of the act, in the performance of which the tortuous act was committed, such third party had exercised control and direction over the performance of the act in question and the manner in which it was to be performed.
The classic case commonly cited and in which this rule was applied is Quarman V. Burnett (1) of.
also Jones vs Scullard(2) where Lord Russel applied the test of the power to, direct and control the act in performance of which damage was caused to another person.
The position in law is, therefore, clear that except in the case of a statutory provision to the contrary, a right to the service of an employee cannot be the subject matter of a transfer by an employer to a third party without the employee 's consent.
Thus, in Nokes vs Doncaster Amalgamated Collieries, Ltd. (3) where an order was made under section 154 of the Companies Act, 1929 transferring all the assets and liabilities of a company to another company.
Viscount Simon held that such an order did not mean that contracts of service between the appellant and the transferer company also stood transferred.
The principle that even in cases where the services of an employee are lent to a third party temporarily for a particular work, the employee still remains the employee of the employer is illustrated in Denham vs Midland Employees Mutual Assurance Ltd.(4).
There Eastwoods Ltd. employed Le Grands to make test borings on their property.
Le Grands provided two skilled drillers with plant and tackle to carry out the borings and Eastwoods Ltd. agreed to provide one of the labourers, one Clegg to assist those skilled men free of charge to Le Grands.
While the said work .was being carried out, Clegg was killed in circumstances in which Le Grands were liable to pay damages to his widow on the ground that his death was caused on account of the negligence of Le Grands or their servants.
Le Grands sought to be indemnified by their insurers against their said liability.
They were covered by two policies, one with the Midland Employers Mutual Assurance Ltd. in respect of their liability to the employees and the other with Lloyds in respect of their liability to the public in general.
The policy issued by the Midland Employers Mutual Assurance Ltd. provided that if any person "under a contract of service" with the insured were to sustain any personal injury by accident caused during the period of employment, and if the insured became liable to pay damages for such injury the association would indemnify the insured against all sums for which he would be so liable.
The policy issued by the Lloyds indemnified Le Grands for any sums for which they might become liable to (1) ; (2) (3) [1940] 3 All England Law Reports 549.
(4) [1955] 2 Q.B.437.
278 pay in respect of death or accidental bodily injury to persons and loss or damage to.
property arising in or out of the business of borings carried out by Le Grands.
The question was whether at the time of his death Clegg was the servant of Le Grands and under "a contract of service" with them as provided in their policy with the Midland Assurance Ltd. Dealing with that question, Denning, L.J. observed that the difficulty which surrounded such a subject arose because of the concept that a servant of a general employer may be transferred to a temporary employer so as to become for the time being his .servant.
Such a concept was, he said, a very useful device to place liability on the shoulders of the one who should properly bear it, but did not affect the contract of service itself.
No contract of service can be transferred from one employer to another without the servant 's consent and such consent is not to be raised by operation of law but only by the real consent in fact of the man express or implied.
He further observed: "In none of the transfer cases which has been cited to us had the consent of the man been sought or obtained.
The general employer has simply told him to go and do some particular work for the temporary employer and he has gone.
The supposed transfer, when it takes place, is nothing more than a device a very convenient and just device, mark you to put liability on to the temporary employer; and even this device has in recent years been very much restricted in its operation.
It only applies when the servant is transferred so completely that the temporary employer has the right to.
dictate, not only what the servant is to do, but also how he is to do it.
" Applying these principles to the facts before him, he observed that he had no doubt that if a third person had been injured by the negligence of Clegg in the course of his work, Le Grands and not Eastwoods would be liable to such third person.
also, when Clegg himself was killed, Le Grands were liable to his widow on the same footing that they were his masters and not merely invitors.
These results were achieved in law by holding that Clegg became the temporary servant of Le Grands.
He further observed that there was no harm in thus describing him so long as it was remembered that it was a device designed to cast liability on the temporary employer.
However, on the question whether Clegg was "under a contract of service" with Le Grands, he held that he was not, for his contract of service was with Eastwoods.
They had selected him and paid his wages and they alone could suspend or dismiss him.
Clegg was never asked to consent to a transfer of the contract of service and he never did so.
If he was not paid his wages or if he was wrongfully dismissed from 279 the work, he could sue Eastwoods for the breach of contract and no one else.
If he failed to turn up for work, Eastwoods alone 'could sue him.
He could, therefore, see no trace of a contract of service with Le Grands except the artificial transfer raised by law so as to make Le Grands liable to others for his faults or liable to him for their own faults and that the artificial transfer so raised cannot be said to be a contract of service within the said policy of assurance.
Le Grands, therefore, were not entitled to 'be indemnified by the Midland Assurance Company under the employers ' liability policy but were entitled to be indemnified by Lloyds under their public liability policy.
A contract of service being thus incapable of transfer unilaterally, such a transfer of service from one employer to another can only be affected by a tripartite agreement between the employer, the employee and the third party, the effect of which would be to terminate the original contract of service by mutual consent and to make a new contract between the employee and the third party.
Therefore, so long as the contract of service is not terminated, a new contract is not made as aforesaid and the employee continues to be in the employment of the employer.
Therefore, when an employer orders him to do a certain work for another person the employee still continues to be in his employment.
The only thing that happens in such a case is that he carries out the orders of his master.
The employee has the right to claim his wages from the employer and not from the third party to whom his services are lent or hired.
It may be that such third party may pay his wages during the time that he has hired his services, but that is because of his agreement with the employer.
That does not preclude the employee from claiming his wages from the employer.
The hirer may also exercise control and direction in the doing of the thing for which he is hired or even the manner in which it is to be done.
But if the employee fails to carry out his directions he cannot dismiss him and can only complain to the employer.
The right of dismissal vests in the employer.
Such being the position in law, it is of the utmost importance in the present case that the appellants at no time took the plea that the contract of employment with the factory was ever terminated or that the respondent gave his consent, express or implied, to his contract of service being transferred to the head office, or that there was a fresh contract of employment so brought about between him and the head office.
Unless, therefore, it is held from the circumstances relied upon by Mr. Phadke that there was a transfer of the contract of service or that Respondent 1 gave his consent, express or implied, to such a transfer, Respondent 1 would continue to be the servant of the factory.
Since the case has been remanded to the Assistant Commissioner, we refrain from making any observations as regards the effect of the admissions 280 said to have been made by Respondent 1 and relied on by the Assistant Commissioner.
Mr. Phadke, however, relied on Jestamani Gulabrai Dholkia vs The Scindia Steam Navigation Company(1) in support of his contention that there was a transfer of the contract of employment and that it was not a mere transfer of the benefit of the services of Respondent 1.
In that case the appellants were originally in the service of the Scindia Steam Navigation Company.
In 1937 Air Services of India Ltd. was incorporated.
In 1943, the Scindias purchased the ASI and by 1946 ASI became a full fledged subsidiary of the Scindias.
Between 1946 to 1951 the Scindias transferred several of their employees including the appellants to the ASI.
The Scindias had a number of such subsidiary companies and it was usual for them to transfer their employees to such companies and also to recall them whenever necessary.
In 1953, the Government of India decided to nationalise the airlines operating in India with effect from June 1953.
On April 6, 1953 the appellants wrote to the Scindias to recall them to their original posts but the Scindias refused to do so as they were not in a position to absorb them.
They pointed out that a Bill, called the Air Corporation Bill, 1953, was pending before Parliament, that under cl. 20 thereof persons working with ASI on the appointed day would become the employees of the Corporation, that under that clause they had the option to resign if they did not wish to join the Corporation and that if the appellants exercised that option.
the Scindias would treat them as having resigned from their service.
The Act was passed on May 28, of the Act provided that every employee of an existing air company employed by such company prior to July 1, 1952 and still in its employment immediately before the appointed day, shall, in so far as such employee is employed in connection with the undertaking which has vested in the Corporation by virtue of the Act, become, as from the appointed date, the employee of the Corporation in which the undertaking has vested.
On june 8, 1953 the appellants made a demand that if the Corporation were to retrench any persons from the staff loaned to ASI within the first five years, the Scindias should take them back.
The Scindias refused.
None of the appellants had exercised the option provided by section 20 (1 ).
On August 1, 1953 ASI became vested in the Corporation and section 20( 1 ) came into force as from that date.
The appellants contended inter alia that the contract of service between them and the Scindias was not transferable.
The contention was rejected on the ground that by reason of section 20(1) the contract of service of the appellants stood transferred to the Corporation and that though the appellants were not originally recruited by ASI and were transferred by the Scindias to the said company, (1) ; 281 they were the employees of ASI and were such employees on the appointed day and since they had not exercised the option under section 20( 1 ) they became the employees of the Corporation by operation of that provision.
The Scindias, therefore, were no longer concerned with them.
It is true that the appellants were transferred to ASI on condition that they would receive the same remuneration and other benefits as they were getting in the Scindias and further that it was possible to contend that Scindias alone could dismiss them.
But the learned Judges explained that these were special terms applicable to the appellants.
But in spite of them they still had become the employees of the ASI and were such employees on the appointed day.
It seems that this conclusion was reached on the footing that since ASI was the subsidiary company of the Scindias like several other subsidiary companies, and it was.
usual for the Scindias to transfer any of their employees to such subsidiary companies, the appellants on their transfer were deemed to have consented to become the employees of ASI in spite of the right of the Scindias to recall them whenever necessary and further that the appellants continued to be and were the employees of the ASI on the appointed day and were, therefore, governed by section 20(1 ) if the Act.
It is clear that this was a case of employees becoming the employees of the Corporation by virtue if the operation of a statute.
The decision, therefore, is not an authority for the proposition that an employer can transfer his employee to a third party without the consent of such employee or ' without terminating the contract of employment with him.
That being the position, the case of Jestamani vs The Scindia Steam Navigation(x) cannot assist Mr. Phadke.
In our view the High Court was, right in setting aside the order of the Assistant Commissioner and the Industrial Court on the ground that unless a finding was reached on the facts of the case that the contract of service with the said factory came to an end and a fresh contract with the head office came into being Respondent 1 continued to be in the employment of the factory and the head office, therefore, was not competent to dismiss him.
The appeal, therefore, fails and is dismissed with costs.
G.C. Appeal dismissed. | The appellant firm had a number of factories including one at Kamptee in Vidharba.
Its head office was also situated there,.
The factory at Kamptee and the head office were treated as separate establishment.
the factory being registered under the Factories Act and the Head Office under the C.P. and Berar Shops and Establishments Act, 1947.
Respondent No. 1 was originally employed at the aforesaid factory but later he was directed to work at the head office.
When the Head Office dismissed him from service he challenged the order of dismissal by an application under section 16 of the C.P. & Berar Industrial Disputes settlement Act.
The Assistant Commissioner dismissed the application holding that Respondent No. 1 at the material time was not an employee of the factory but was employed in the Head Office.
The Industrial Court refused, in revision, to interfere with the Assistant Commissioner 's order.
Respondent No. 1 filed a writ petition under article 226 of the Constitution.
The High Court observed that unless it was established that the employment of Respondent No. 1 in the factory was legally terminated it could be assumed merely because he was direct to work in the head office, that his employment was changed and the head office was substituted as his.
employer in place of the said factory.
, As the order passed by the Assistant Commissioner was not clear on this question the High Court remanded the case for disposal according to law.
The firm appealed to this Court.
HELD: (i) A contract for service is incapable of transfer unilaterally.
Such a transfer of service from one employer to another can only be effected by a tripartite agreement between the employer, the employee and the third party, the effect of which would be to terminate the original contract of service by mutual consent and to.
make a new contract between the employee and the third party.
So long as the contract of service is not terminated, a new contract is not made as aforesaid, and the employee continues to be in the employment of the employer.
Therefore, when an employer orders him to: do certain work for another person the employee still continues to be i.n his employment.
The only thing that happens in such a case is that he carries out the orders of his master.
employee has the right to claim his wages from the employer and not from the third party to whom his services are lent or hired.
It may be that such a third party may pay his wages during the time that he has hired his services, but that is because of his agreement with the employer.
that does not preclude the employee from claiming his wages from the employer.
the hirer may also.
exercise control and direction in the doing of the thing for which he is hired or even the manner in which it is to be done.
But if the employee fails to.
carry out his direction he cannot 273 dismiss him and can only complain to the employee.
The 'right of dismissal vests with the employer.
[279 &F] Such being the position in law, in the present case the High Court was right in setting aside the order of the Assistant Commissioner and the Industrial Court on the ground that unless a finding was reached on the facts of the case that the contract of service with the said factory came to an end and a fresh contract with the head office came into being, Respondent No. 1 continued to be in the employment of the factory and the head office therefore was not competent to dismiss him.
[281 F] Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd. ; at 17, Century Insurance Co. Ltd. vs Northern Ireland Road Transport Board, [1942] A.C. 509, Quarman vs Burnett, ; , Jones vs Scullard, , Nokes vs Doncaster Amalgamated Collieries, Ltd. [1940] 3 All England Law Reports 549 and Denham vs Midland Employees Mutual Assurance Ltd., , referred to.
Jestamani Gulabrai Dholkia vs The Scindia Steam Navigation Company ; , distinguished. |
ivil Appeal Nos. 2168, 2569, of 1966, 76, 123 and 560 of 1967.
Appeals by special leave from the Award dated June 30, 1966 of the Industrial Tribunal, Delhi in I.D. No. 70 of 1958.
S.T. Desai, Rameshwar Nath and Mahinder Narain, for the appellant (in C.A. No. 2168 of 1966) and respondents Nos. 1 and 2 (in C.As.
Nos. 123 and 560 of 1967).
311 H.R. Gokhale, A.K. Sen, R.P. Kapur and 1.
N. Shroff, for the appellant (in C.A. No. 256,9 of 1966) and respondent No. 3 (in C.As.
Nos. 123 and 560 of 1967).
B. Sen, 1.
D. Gupta, M.N. Shroff for 1.
N. Shroff, for the appellant (in C.A. No. 76 of 1967).
M.K. Ramamurthi, Madan Mohan, Shyamala Pappu and Vineet Kumar, for the appellant (in C.A. No. 123 of 1967), respondents Nos. 1 (a) and 4(a) (in C.A. No. 2168 of 1966), respondent No. 1 (in C.A. No. 2569 of 1966), respondent No. 1 (in C.A. No. 76 of 1967) and respondent No. 5 (in C.A. No. 560 of 1967).
V.C. Parashar and O.P. Sharma, for the appellant (in C.A. No. 560 of 1967) respondents Nos. 1 (b) and 4(b) (in C.A. No. 2168 of 1966) respondent No. 2 (in C.A. No. 2569 of 1968) and respondent No. 2 (in C.A. No. 76 of 1967).
The Judgment of the Court was delivered by Shah, J.
These appeals arise out of an award made by the Industrial Tribunal, Delhi, in I.D. Reference No. 70 of 1958.
The first three appeals are filed by the employers, and the last two by the employees.
By its award the Industrial Tribunal (Delhi, has framed two schemes relating to payment of gratuity to the workmen employed in four textile units in the Delhi region.
The employers and the workmen are dissatisfied with the schemes and they have filed these appeals challenging certain provisions of the schemes.
In the Delhi region there are four textile units; the Delhi Cloth Mills which will be referred to.
as D.C.M.; Swatantra Bharat Mills which will be referred to as S.B.M.; Birla Cotton Mills which will be referred to as B.C.M. and Ajudhia Textile Mills which will be referred to as A.T.M. The D.C.M. and S.B.M. are under one management.
On March 4, 1958, the Chief Commissioner of Delhi made a reference under sections 10(1)(d) and 12(5) of the , relating to four matters in dispute, first of which is as follows: "Whether a gratuity for retirement benefit scheme should be introduced for all workmen on the following lines and what directions are necessary in this respect ? 1.
for service less than 5 years Nil.
for service between 5 10 years 15 days ' wages for every year of service.
for service between 10 15 years 21 days ' wages for every year of service.
312 4.
for service over 15 years one month 's wages for every year of service.
" The reference related to workmen only and did not apply to the clerical staff or mistries.
There are two workmens ' Unions in the Delhi region the Kapra Mazdoor Ekta Union hereinafter called 'Ekta Union ', and the other, the Textile Mazdoor Union.
The Ekta Union made a claim principally for fixation of gratuity in addition to the benefit of provident fund admissible to the workmen under the Employees Provident Fund Act, to be computed on the consolidated wages inclusive of dearness allowance.
The Ekta Union submitted by its statement of claim that a gratuity scheme based on the region cum industry principle i.e. a uniform scheme applicable to all the four units be framed.
The Textile Mazdoor Union also supported the claim for the framing of a gratuity scheme on the basis of the consolidated wages of workmen but claimed that the scheme should be unit wise.
At the trial, it appears that both the Unions pressed for a unit wise scheme of gratuity.
The Tribunal entered upon the reference in respect of the fixation of gratuity scheme in February 1964 and made an award on June 30, 1966, operative from January 1, 1964.
The award was published on August 4, 1966.
By the award two schemes were framed one relating to the D.C.M. and S.B.M., and another relating to the B.C.M. and A.T.M.
Under the second scheme the digit by which the number of completed year of service was to be multiplied in determining the total gratuity was smaller than the digit applicable in the case of the D.C.M. and the S.B.M.
The distinction was made between the two sets of units, because the D.C.M. and S.B.M. were, in the view of the Tribunal, more prosperous units than the D.C.M. and A.T.M. The A.T.M., it was found, was a newcomer in the field of textile manufacture, and had for many years been in financial difficulties.
The D.C.M. employs more than 8,000 workmen in its textile unit; the S.B.M. has on its roll 5,000 workmen; the B.C.M. has 6,271 workmen and the A.T.M. has 1,500 workmen.
The D.C.M. and S.B.M. have a common retirement benefit scheme in operation since the year 1940.
Under the scheme gratuity payable to workmen is determined by the length of service before retirement.
The scheme of gratuity in operation in the D.C.M. and S.B.M. is as that, "In case of retirement from service of the Mills as a result of physical disability, due to over age or on account of death after a minimum of seven years '.
313 service in the concern: 7 years .
Rs. 350/ 8 years .
Rs. 425/ 9 years .
Rs. 500/ 10 years .
Rs. 575/ 11 years .
Rs. 650/ 12 years .
Rs. 725/ 13 years .
Rs. 800/ 14 years .
Rs. 875/ 15 years .
Rs. 950/ 16 years .
Rs. 1,050/ 17 years .
Rs. 1,150/ 18 years .
Rs. 1,250/ 19 years .
Rs. 1,350/ 20 years .
Rs. 1 '500/ The scale of gratuity, it is clear, is independent of the individual wage scale of the workman.
In the B.C.M. and A.T.M. units there are no such schemes.
Till the year 1958 there were no standardised wages in the textile industry.
According to the Report of the Central Wage Board for the Cotton Textile Industry which was published on November 22, 1959, there were in India 39 regions in which the textile industry was located.
The basic monthly wages of the workmen in the year 1958 varied between Rs. 18/ in Patna and Rs. 30/ in various centers like Bombay, Indore, Madras, Coimbatore, Madurai, Bhiwani, Hissar, Ludhiana, Cannanore and certain regions in Rajasthan and Delhi.
The Wage Board recommended in Paragraph 106 of its Report: "The Board has come to the conclusion that an increase at the average rate of Rs. 8 per month per worker shall be given to all workers in mills of category I from 1st January 1960, and a further flat increase of Rs. 2 per month per worker shall be given to them from 1st January 1962.
Likewise an increase at the average rate of Rs. 6 per month per worker shall be given to all the workers in mills of category 11 from 1st January 1960, and a further flat increase of Rs. 2 per month per worker shall be given to them from 1st January 1962.
These increases are subject to the condition that the said sums of Rs. 8 and Rs. 6 shall ensure not less than Rs. 7 and Rs. 5 respectively to the lowest paid, and that the increase of Rs. 2 from 1st January 1962 shall be flat for all." Category I included the Delhi region.
Since January 1, 1962, the basic minimum wage in the Delhi region is, therefore Rs. 40/Sup.
CI/69 3 314 according to the recommendations of the Wage Board.
In Bombay City and Island (including Kurla), the basic wage, according to the Report of the Wage Board, was also Rs. 30/and by the addition of Rs. 10 the basic wage of a workman came to Rs. 40/ .
The workmen in other important textile centres also get the same rates.
The Tribunal was of the view that the average basic wage of the workmen is Rs. 60/ since the implementation of the Wage Board in the Delhi region.
No argument was advanced before this Court challenging the correctness of that assumption, by the employers or the workmen.
It was also common ground that practically uniform basic wage levels prevail in all the large textile centres like Bombay, Ahmedabad, Coimbatore and Indore.
Besides the basic wage the workmen receive dearness allowance under diverse awards made by the Industrial Tribunals which "seek to neutralize the cost of living index.
" There is also a provident fund scheme under the Employees.
Provident Fund Act, 1962, whereunder 8 1/3% of the basic wage and the dearnear allowance and the retaining allowance for the time being in force is contributed by the employee.
Besides, there is a right to retrenchment compensation under the (section 25 FFF) and the Employees Insurance Scheme.
In view of the observations of this Court in Burhanpur Tapti Mills Ltd. vs Burhanpur Tapti Mills Mazdoor Sangh(1), that "It is no longer open to doubt that a scheme of gratuity can be introduced in concerns where there.
already exist other schemes such as provident fund or retrenchment compensation.
This has been ruled in a number of cases of this Court and recently again in Wenger & Co. and others vs Their Workmen(2), and Indian Hume Pipe Company Ltd. vs Their Workmen(3).
It is held in these cases that although provident fund and gratuity are benefits available at retirement they are not the same ,and one can exist with the other", no serious argument was advanced that the existence of these additional benefits disentitled the workmen to obtain benefits under a gratuity scheme if the employer is able to meet the additional burden.
But on behalf of all the employers it was, urged that (1) in determining the quantum of gratuity, basic wage alone could be taken into account and not the consolidated wage; and (2 ) it was necessary for the Tribunal to fix when introducing a gratuity scheme the age of superannuation.
On behalf of the D.C.M., S.B.M. and B.C.M. it was urged in addition, that a uniform scheme applicable to the entire industry on the region cumindustry basis should have been adopted and not a scheme or schemes applicable to individual units.
On behalf of the A.T.M. (1) , (2) [1963] II L.L.J. 403.
(3) [1959] II L.L.J. 830. 315 it was urged that its financial condition is not and has never been stable and the burden of payment of gratuity to workmen dying or disabled or on voluntary retirement from service or when their employment is terminated is excessive and the Unit was unable, to bear that burden.
It was also urged on behalf of the A.T.M. that in view of a settlement which was reached between the management and workmen it was not open to the Tribunal to ignore the settlement and to impose a scheme for payment of gratuity in favour of the workmen in this reference.
While broadly supporting the award of the Tribunal the workmen claim certain modifications.
They claim that a shorter period of qualifying service for workmen voluntarily retiring should be provided, and gratuity should be worked out by the application of a larger multiple of days for each completed year of service; that the ceiling of gratuity should be related to a larger number of months ' wages; that gratuity should be awarded for dismissal even for misconduct; that provision should be made for payment of gratuity to Badli workmen irrespective of the number of days for which they work in a year; that the expression "average of the basic wage" should be appropriately clarified to avoid disputes in the implementation of the gratuity scheme, and that the award should be made operative not from January 1, 1964, but from the date of the reference to the Tribunal.
The two schemes which have been flamed may be set out: ANNEXURE 'A ' "Gratuity scheme applicable to the Delhi Cloth Mills and the Swatantra Bharat Mills. ' Gratuity will be payable to the employees concerned, in this reference, on the scale and subject to the conditions laid down below: 1.
On the death of an employee while in the service of the mill company or on his becoming physically or mentally incapacitated for further service: (a) After 5 years continuous service and less than 10 years ' service 12 days ' wages for each.completed year of service.
(b) After continuous service of 10 years 15 days ' wages for each completed year of service.
The gratuity will be paid in each case under clauses 1(a) and 1(b) to the employee, his heirs or executors, or nominee as the case may Provided that in no case will an employee, who is in service on the date on which this scheme is brought 316 into operation be paid an mount less than what he would have been entitled to under the pre existing scheme of the Employees ' Benefit Fund Trust.
(ii) Provided further that the maximum payment to be made shall not exceed the equivalent of 15 months wages.
(iii) Provided further that gratuity under this scheme will not be payable to any employee who has already received gratuity under the preexisting scheme of the Employees ' Benefit Fund Trust.
On voluntary retirement or resignation after 15 years ' service 15 days ' wages for each completed year of service.
Provided that the maximum payment to be made shall not exceed the equivalent of 15 months ' wages.
On termination of service on any ground whatsoever except on the ground of misconduct As in clauses 1 (a) and 1 (b) above.
Provided that the maximum payment to be made shall not exceed the equivalent of 15 months ' wages.
Definitions: (a) 'Wages ' The term "wages" in the scheme will mean the average of the basic wage plus the dearness allowance drawn during the 12 months next preceding death, incapacitation, voluntary retirements, resignation or termination of service and will not include overtime wages.
(b) "Basic wages" The term "basic wage" will have the meaning as defined in paragraph 110 of the Report of the First Central Wage Board for Cotton Textile Industry.
(c) "Continuous service" means un interrupted service and includes service which may be interrupted on account of sickness, authorised leave, strike which is not illegal, lock out or cessation of work which is not due to any fault on the part of the employee: Provided that interruption in service upto six months ' duration at any one time and 18 317 months duration in the aggregate of the nature other than those specified above shall not cause the employee to lose the credit for previous service in the Mills for the purpose of calculation of gratuity, but at the same time shall not entitle him to claim benefit of gratuity for the period of such interruption.
Service for the purposes 'of gratuity will include service under the previous management whether in the particular mill or other sister mill under the same management.
(d) "Resignation" The word "resignation" will include abandonment of service by an employee provided he Submits his resignation within a period of three months from the first day of absence without leave.
(e) "Length of service" For counting "length of service: ', fraction of a year exceeding six months shall count as one full year, and six months or less shah be ignored.
"Application for gratuity" Any person eligible to claim payment of gratuity under this scheme shall, so far as possible, send a written application to the employer within a period of six months from the date its payment becomes due.
"Payment of gratuity" The employer shall pay the amount of gratuity to the employee and in the event of his death before payment to the person or persons entitled to it under clause 1 above within a period of 90 days of the claim being presented to the employer and found valid.
"Claims by persons who are no longer in service" Claims by persons who are no longer in service of the Company on the date of the publication of this award shall not be entertained unless the claims are preferred within six months from the date of publication of this award.
"Badli service" Gratuity shall be paid for only those years of Badli service in which the employee has worked for not less than 240 days.
318 9.
"Proof of incapacity" In proof of physical or mental incapacity, it will be necessary to produce a certificate from any one of the Medical Authorities out of a panel to be jointly drawn up by the parties.
"Nomination" (a) Each employee shall, within six months from the date of the publication of this award, make a nomination conferring the right to receive the amount of gratuity that may be due to him in the event of his death, before payment has been made.
(b) A nomination made under sub clause (a) above may, at any time, be modified by the employee after giving a written notice of his intention of doing so.
if the nominee pre deceases the employee, the interest of the nominee shall revert to the employee who may make a fresh nomination in respect of such interest.
" ANNEXURE 'B ' "Gratuity scheme applicable to the Birla Cotton Spg.
& Wvg.
Mills and the Ajudhia Textile Mills.
Gratuity will be payable to the employees concerned in this reference, on the scale and subject to the conditions laid down below: 1.
On the death o/an employee while in the service of the Mill company or on his becoming physically or mentally incapacitated for further service: (a) After 5 years continuous service and less than 10 years service One fourth month 's wages for each competed year of service.
(b) After continuous service of 10 years One third month 's wages for each completed year of service.
The gratuity will be paid in each case under clauses 1(a) and 1(b) to the employee, his heirs or executors, or nominee, as the case may be.
Provided that the maximum payment to be made shah not exceed the equivalent of 12 months ' wages.
On voluntary retirement or resignation after 15 years service On the same scale as in 1 (b) above.
Provided that the maximum payment to be made shall not exceed the equivalent of 12 months ' wages.
On termination of service by the employer for any reason whatsoever eXcePt on the ground of misconduct As in clauses 1(a) and 1(b) above.
319 provided that the maximum payment to be made shall not exceed the equivalent of 12 months ' wages." [Clauses 4 to 10 of Annexure 'B ' are the same I as in Annexure 'A ' and need not be repeated.] Whether against the A.T.M. the Tribunal was incompetent to make an award framing a .scheme for payment of gratuity may first be considered.
Counsel for the A.T.M. urged that there was a settlement between the workmen and the management of the A.T.M. in consequence of which the Tribunal was incompetent to make an award.
The facts on which reliance was placed are these: After ,the dispute was referred .to the Industrial Tribunal, there were negotiations between the management of the A.T.M. and workmen represented by the two Unions and an agreement was reached, the terms whereof were recorded in writing.
Clauses 6 and 11 (4) of the agreement relate to the claim for gratuity: "6.
The workmen agree not to claim any further increase in wages, basic or dearness, or make any other demand involving financial burdens on the Company either on their initiative or as a result of any award, till such time as the Working of the mills results in profits.
The parties hereto agree to jointly withdraw in terms of this settlement, the following pending cases and proceedings before the Courts, Tribunals and Authorities and ' more especially . . . . . (4) With regard to I.D. No. 70 of 1958 the workers agree not to claim any benefits that ,may be granted under the above reference by the Hon 'ble Industrial Tribunal in case the award is.
given in favour of the workmen, subject to clause 7 above." (It is common ground that reference to el. 7 is erroneous: it should be .to cl. 6.) The workmen and the management of the unit submitted an application before the Tribunal on December 28, 1959, admitting that there had been an "overall settlement" of all the pending disputes between the management of A.T.M. and its workmen represented by the two Unions, and requested that an interim award be made in terms of the agreement insofar as the dispute related to the A.T.M. No order was passed by the Tribunal on that application.
On June 4, 1962, the Manager of the A.T.M. applied to the Tribunal that an interim award be pronounced in terms of the agreement.
The workmen had apparently changed their attitude by that time and filed a written statement and requested that the ,prayer contained in paragraph 3 of the application "be rejected 320 as impermissible in law".
The Tribunal made an order on November 26, 1962, and observed: ". the only interpretation that can be given to clause 11(4) of the settlement read with clause 7 is, that the workers of the Ajudhia Textile Mills had bound themselves not to claim any benefits that might be granted by the Tribunal in the award on the present reference, if it turns out to be in favour of the workmen unless and until the working of the Mills results in profit.
The fact that the passing of an award on the demands was envisaged under the settlement goes to show that the demands were to be adjudicated upon in any case.
The main case will now proceed in respect of all the mills and the effect of the settlement and of the application dated 28th December, 1959, and of the 5th July 1962 will be considered at the time of the final award.
" But in making the final award the Tribunal did not specifically refer to the settlement.
The terms of cl. 6 of the settlement clearly show that if it be found that the A.T.M. had acquired financial stability, it will be liable to pay gratuity to the workmen.
We are unable to agree with the contention of counsel for the A.T.M. that it was intended by the parties that the adjudication proceedings against the A.T.M. should be dropped, and after the A.T.M. became financially stable a fresh claim should be made by the workmen on which a reference may be made by the Government for adjudication of the claim for gratuity against the A.T.M.
The contention by the management of the A.T.M. that the Tribunal was incompetent to determine the gratuity payable to the workmen of the A.T.M. must therefore fail.
The other contention raised on behalf of the A.T.M. that its financial position was "unstable" need not detain us.
The Tribunal has held that the A.T.M. was working at a loss since the year 1953 54 and the losses aggregated to Rs. 6.22 lakhs in the year 1958 59, but thereafter the financial position of the Unit improved.
The trading account for the period ending March 31, 1960, showed profits amounting to Rs. 3.10 lakhs.
In 1960 61 there was a surplus of Rs. 11.18 lakhs out of which adjusting the depreciation, development rebate reserve and reserve for bad and doubtful debts, there was a balance of Rs. 7.10 lakhs.
In 1961 62 the net profits of the Unit amounted to Rs. 7.48 lakhs and the A.T.M. distributed Rs. 52,500/ as dividend.
In 1962 63 there was a gross profit of Rs. 4.18 lakhs and after adjusting depreciation and development rebate reserve there was a net deficit of Rs. 30,517/ .
In 1963 64 there was a gross profit of Rs. 14.29 lakhs and after adjusting depreciation, reserve for doubtful debts, bonus to employees and development rebate reserve, there re 321 mained a net profit of Rs. 4.71 lakhs.
The Tribunal observed that by 1961 62 all previous losses of the Unit were wiped out and that even during the year 1962 63 in which there was labour unrest the gross profits were substantial and taking into consideration the reserves built by the Company "the picture was not disheartening and from the great progress that had been made since 1959 60 there was every reason to think that the Mill had achieved stability and reasonable prosperity and that it had an assured future", and the Company was in a position to meet the burden of a modest gratuity scheme.
We see no reason to disagree with the finding recorded by the Tribunal on this question.
On behalf of the D.C.M., S.B.M., and B.C.M. it was urged that normally gratuity schemes are framed on the region cum dustry principle, i.e., a uniform scheme applicable to all Units in an industry in a region is framed, and no ground for departure from that rule was made out.
It was urged that this Court has accepted invariably the region cum industry principle in fixing the rates at which gratuity should be p.aid.
In our judgment no such rule has been enunciated by this Court.
In Bharatkhand Textile Mfg. Co. Ltd. vs Textile Labour Association, Ahmedabad(1), this Court in dealing with the question whether the Industrial Court had committed an error in dealing with the claim for gratuity on industry wise basis negatived the contention of the employers that the unit wise basis was the only basis which could be adopted in fixing the rates of gratuity.
It was observed at p. 345: "Equality of competitive conditions is in a sense necessary from the point of view of the employers themselves; that in fact was the claim made by the Association which suggested that the gratuity scheme should be framed on industry wise basis spread over the whole of the country.
Similarly equality of benefits such as gratuity is likely to secure contentment and satisfaction of the employees and lead to industrial peace and harmony.
if similar gratuity schemes are framed for all the units of the industry migration of employees from one unit to another is inevitably checked, and industrial disputes arising from unequal treatment in that behalf are minimaised.
Thus, from the point of view of both employers and employees industry wise approach is on the whole desirable.
" It is clear that the Court rejected in that case the argument that rates of gratuity should be determined unit wise: the Court did not rule that in all cases the region cum industry principle should be adopted in fixing the rates of gratuity.
That was made explicit in a later judgment of this Court: Burhanpur Tapti Mills Ltd. vs (1) ; 322 Burhanpur Tapti Mills Mazdoor Sangh(x).
This Court observed at p. 456: ". it has been laid down by this Court that there are two general methods of fixing the terms of a gratuity scheme.
It may be fixed on the basis of industry cum region or on the basis of units.
Both systems axe admissible but regard must be had to the surrounding circumstances to select the right basis.
Emphasis must always be laid upon the financial position of the employer and his profit making capacity whichever method is selected." In Garment Cleaning Works vs Its Workmen(1) this Court observed at p. 713: ". it is one thing to hold that the gratuity scheme can, in a proper case, be flamed on industry cum region basis, and another thing to say that industry cum region basis is the only basis on which gratuity scheme can be framed.
In fact, in a large majority of cases gratuity schemes are drafted on the basis of the units and it has never been ,suggested or held that such schemes are not permissible.
" The Tribunal in the award under appeal observed: "There are . . certain peculiar features in the textile industry in this region which militate against an indnstry cum region approach.
Apart from the fact that one of the four units, namely, the Ajudhia Textile 'Mills is a much weaker unit than the rest and has passed through a chequered career during its existence, it has to be borne in mind that two of the units namely D.C.M. and S.B.M. which axe sister concerns, already have some sort of a gratuity scheme providing for two important retiral benefits, namely, death and physical disablement on a scale which is independent of wage variations and is not unsubstantial at least for categories in the lower levels.
" The Tribunal further observed: "if a common scheme is framed for the entire textile industry at Delhi i.e. for all the four units the quantum of benefits under that scheme will naturally have to be much lower in consideration of the financial condition of the Ajudhia Textile Mill, than if a unit wise scheme is framed.
Moreover in a common scheme of gratuity the quantum of benefits to be provided will have to be (1) (2) ; [1961] I L.L.J. 513.
323 lower than the benefits already available to workmen in the D.C.M. and S.B.M. units for the most important contingencies for which gratuity benefits are meant, namely, death and retirement on account of physical or mental incapacity.
Such a lowering of the quantum of benefits would not in my view be desirable as it would create legitimate discontent.
" In our judgment, no serious objection may be raised against the reasons set out by the Tribunal in support of the view that unitwise approach should be adopted in the reference before it and not the region cum industry approach.
No case is there/ore made out for interference with the award made determining the rates of gratuity unit wise.
We also agree with the Tribunal that on the terms of the reference it was incompetent to fix the age of superannuation forworkmen.
We are unable to hold that a gratuity scheme may be implemented only if the age of superannuation of the workmen is determined by the award.
Support was sought to be derived by counsel for the employers in support of his plea from the observations made by this Court in Burhanpur Tapti Mills Ltd. 's case(D, where in examining the nature of gratuity, it was observed: "The voluntary retirement of an inefficient or old ' or worn out employee on the assurance that he is to get a retiral benefit leads to the avoidance of industrial disputes, promotes contentment among those who look for promotions.
, draws better kind of employees and improves the tone and morale of the industry.
It is beneficial all round.
It compensates the employee who as he grows old knows that some compensation for the gradual destruction of his wage earning capacity is being built up.
By inducing voluntary retirement of old and worn out workmen it confers on the employer a benefit akin to the replacing of old and worn out machinery.
" There is, in our judgment, nothing in these observations which justifies the view that a gratuity scheme cannot be effective unless it is accompanied by the fixation of the age of superannuation for the workmen in the industry.
There is another objection to the consideration of this claim made on behalf of the employers.
By the express terms of reference the Tribunal is called upon to adjudicate on the question of fixation of gratuity: there is no .reference either expressly or by implication to the fixation of the age of superannuation and in the absence of any reference relating to the fixation of the age of (1) [1965] 1 LL.J. 453.
324 superannuation, the Tribunal was not competent to fix the age of superannuation.
A gratuity scheme may, in our judgment, be implemented even without fixing the age of superannuation.
The gratuity scheme in operation in the D.C.M. and S.B.M. has been effectively in operation without any age of superannuation for the workmen in the two units.
An enquiry into the question of fixing the age of superannuation did not arise out of the terms of reference.
No such claim was made by workmen and ' even in the written statement filed by the employers no direct reference was made to the fixation of the age of superannuation, nor was there any plea that before framing a gratuity scheme the Tribunal should provide for the age of superannuation.
We agree with the Tribunal that fixation of the age of superannuation was not incidental to the ,framing of the gratuity scheme 'and it was neither necessary nor desirable that it should be fixed.
Counsel for the employers urged that the Tribunal committed a serious error in relating the computation of gratuity payable to the workmen on retirement on the consolidated monthly wage and not on the basic wage.
"Gratuity" in its etymological sense means a gift especially for services rendered or return for favours received.
For some time in the early stages in the adjudication of industrial disputes, gratuity was treated as a gift made by the employer at his pleasure and the workmen had no right to claim it.
But since then there has been a long line of precedents in which it has been ruled that a claim for gratuity is a legitimate claim which the workmen may make and which in appropriate cases may give rise to an industrial dispute.
In Garment Cleaning Works ' case(1) it was observed that gratuity is not paid to the employees gratuitously or merely as a matter of boon.
It is paid to him for the service rendered by him to the employer.
The same view was expressed in Bharatkhand Textile Mfg. Ltd. 's case(2) and Calcutta Insurance Ltd. vs Their Workmen(a).
Gratuity paid to workmen is intended to help them after retirement on superannuation, death, retirement, physical incapacity, disability or otherwise.
The object of providing a gratuity scheme is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer.
It is one of the 'efficiency devices ' and is considered necessary for an 'orderly and humane elimination ' from industry of superannuated or disabled employees who, but for such retiring benefits, would continue in employment even though they function inefficiently.
It is not paid to an employee .gratuitously or merely as a matter of boon; it is paid to him for long and meritorious service rendered by him to the employer.
(1) (2) ; (3) [1967] II L.L.J. 1.
325 On the findings recorded by the Tribunal all the textile units in the Delhi region are able to meet the additional financial burden, resulting from the imposition of a gratuity scheme.
The D.C.M. and S.B.M. have their own schemes which enable the workmen to obtain substantial benefit on determination of employment.
The B.C.M. though a weaker unit is still fairly prosperous and is able to bear the burden: so also the A.T.M.
But the important question is whether these four units should be made liable to pay gratuity computed on the consolidated wage i.e., basic wage plus the dearness allowance.
The Tribunal was apparently of the view that in determining the question the definition of the word "wages.
" in the industrial Disputes Act, 1947, would come to the aid of work men.
The expression "wages" as defined in section 2(rr) of the means all remuneration, capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment and includes among other things, such allowances (including dearness allowance) as the workman is for the time being entitled to.
But we are unable to hold that in determining the scope of an industrial reference, words used either in the claim advanced or in the order of reference made by the Government under section 10 of the must of necessity have the meaning they have under the .
Merely because the expression "wages" includes dearness allowance within the meaning of the , the Tribunal is not obliged to base a gratuity scheme on consolidated wages.
The Tribunal has observed that the basic average wage of a workman in the textile industry in the Delhi region may be taken at Rs. 60/ per month, and the dearness allowance at Rs. 100/per month, and even if full one month 's basic wage is adopted as the minimum quantum of benefits to be allowed in the case of wage group with service of 5 years and more the scale of benefit would be very much lower than the present scale in the two contingencies provided in the Employees Benefit Fund Trust Scheme in operation in the D.C.M. and S.B.M. And observed the Tribunal: "In view of the limitations of the terms of reference, the quantum cannot exceed 15 days ' wages for every year of service from 5 to 10 years and 21 days ' wages for every year of service from 10 15 years.
Any schemes framed within the limitations of the terms of reference on the basis of basic wage alone will therefore mean a scale of benefits much lower than even the present scheme under the Employees Benefit Fund Trust.
Such 326 a scheme cannot, therefore, be framed without causing grave injustice and acute discontent, because it will mean the deprivation of even the present scale of benefits in the case of a large body of workers.
In order to maintain, so far as possible, the present level of benefits I have, therefore, no alternative but to frame for these two units a scheme based on basic wage plus dearness allowance.
" A scheme of gratuity based on consolidated wages was also justified in the view of the Tribunal because it "was also necessary to compensate for the ever diminishing market value of the rupee".
The Tribunal did however observe that normally gratuity is based not on the consolidated wage but on basic wage.
But since 13,000 workmen out of a total of 20,000 workmen in the region would stand to lose the benefits granted to them under a voluntary scheme introduced by the D.C.M. and S.B.M. a departure from the normal pattern should be made and gratuity should be based on the consolidated monthly wage.
In our judgment, the conclusion of the Tribunal cannot be supported.
The primary object of industrial adjudication is, it is said, to adjust the relations between the employers and employees or between employees inter se with the object of promoting industrial peace, and a scheme which deprives workmen of what has.
been granted to them by the employer voluntarily would not secure industrial peace.
But on that account the Tribunal was not justified in introducing a fundamental change in the concept of a benefit granted to the workmen in the textile industry all over the country by numerous schemes.
, The appropriate remedy is to introduce reservations protecting benefits already acquired and to frame a scheme consistent with the normal pattern prevailing in the industry.
We consider it fight to observe that in adjudication of industrial disputes settled legal principles have little play: the awards made by industrial tribunals are often the result of ad hoc determination of disputed questions, and each determination forms a precedent for determination of other disputes.
An attempt to search for principle from the law built up on those precedents is a futile exercise.
To the Courts accustomed to apply settled principles to facts determined by the application of the judicial process, an essay into the unsurveyed expanses of the law of industrial relations with neither a compass nor a guide, but only the pillars of precedents is a disheartening experience.
The Constitution has however invested this Court with power to sit in appeal over the awards of Industrial Tribunals which are, it is said, rounded on the somewhat hazy background of maintenance of industrial peace, which secures the prosperity of the industry and improvement of the conditions of workmen employed in the industry, and in 327 the absence of principles precedents may have to be adopted as guides some what reluctantly to secure some reasonable degree of uniformity of harmony in the process.
But the branch of law relating to industrial relations the temptation to be crusaders instead of adjudicators must be firmly resisted.
It would not be out of place to remember the statement of the law made in a different context but nonetheless appropriate here by Douglas, J., of the Supreme Court of the United States in United Steel Workers of America vs Enterprise Wheel and Car Corporation(1): ". as arbitrator does not sit to dis pense his own brand of industrial justice.
He may of course look for guidance from many sources, yet his award.
is legitimate only so long as it draws its essence from the collective bargaining agreement.
When the arbitrator 's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.
" We may at once state that we are not for a moment suggesting that the law of industrial relations developed in Our country has proceeded on lines parallel to the direction of the law in the United States.
One of the grounds which appealed to the Tribunal in relating to the rate of gratuity to the consolidated wage was the existence of a gratuity scheme in the D.C.M. & S.B.M. and the assumption that the Tribunal in adjudicating a dispute is always, in exercise of its jurisdiction, limited when determining the rate of gratuity to the multiple number of days of service in the order of reference, and cannot depart therefrom.
We are unable to hold that Industrial Tribunal is subject to any such restriction.
Its power is to adjudicate the dispute.
It cannot proceed to adjudicate disputes not referred: but when called upon to adjudicate whether a certain scheme "on the lines indicated" should he framed, the basic guidance cannot be deemed to impose a limit upon its jurisdiction.
As already stated, gratuity is not in its present day concept merely a gift made by the employer in Iris own discretion.
The workmen have in course of time acquired a right to gratuity on determination of employment provided the employer can afford having regard to his financial condition, to pay it.
There is undoubtedly no statutory direction for payment of gratuity as it is in respect of provident fund and retrenchment compensation.
The conditions for the grant of gratuity are, as observed in Bharatkhand (1) ; 325 Textile Mfg. Co. Ltd. 's case(1), (i) financial capacity of the employer; (ii) his profit making capacity; (iii) the profits earned by him in the past; (iv) the extent of his reserves; (v) the chances of his replenishing them; and (vi) the claim for capital invested by him.
But these are not exhaustive and there may be other material considerations which may have to be borne in mind in determining the terms and conditions of the gratuity scheme.
Existence of other retiring benefits such as provident fund and retrenchment compensation or other benefits do not destroy the claim to gratuity: its quantum may however have to be adjusted in the light of the other benefits.
We may repeat that in matters relating to the grant of gratuity and even generally in the settlement of disputes arising out of industrial relations, there are no fixed principles, on the application of which the problems arising before the Tribunal or the Courts may be determined and often precedents of cases determined adhoc are utilised to build up claims or to resist them.
It would in the circumstances be futile to attempt to.
reduce the grounds of the decisions given by the Industrial Tribunals, the Labour Appellate Tribunals and the High Courts to the dimensions of any recognized principle.
We may briefly refer to a few of the precedents relating to the grant of gratuity.
In May and Baker (India) Ltd. vs Their Workmen(2) the claim of the workmen to fix gratuity on the basis of gross salary was rejected by the Industrial Tribunal and the quantum was related to basic salary i.e., excluding dearness allowance.
The view taken by the Tribunal was affirmed by this Court.
In British India Corporation vs Its Workmen(3) the existing gratuity scheme directed payment of gratuity in terms of consolidated wages.
The Tribunal however modified the scheme while retaining the basis of consolidated wages which was held to be justified and reasonable.
This Court observed that prima facie gratuity is awarded not by reference to consolidated wages but on basic wages and the Tribunal had made a departure from that.
But in the view of the Court no interference with the scheme framed by the Tribunal was called for.
In British Paints (India) Ltd. vs Its Workmen(4) the Court followed the judgment in May and Baker (India) Ltd.(a) that it would be proper to follow the usual pattern of fixing the quantum of gratuity on basic wage excluding dearness allowance.
But the same principle was not adhered to in all cases.
For instance in Hindustan Antibiotics Ltd. vs Their Workmen(5), it was observed: (1) ; (2) [1961] II L.L.J. 94 (S.C.).
(3) [1965] II L.L.J. 556 (S.C.).
(4) [1966] I L.L.J. 407.
(5) [1967] I L.L.J. 114 (S.C.)==A.I.R. 329 "The learned counsel for the Company then argued that there is a flagrant violation or departure from the accepted norms in fixing the wage structure and the dearness allowance and therefore, as an exceptional case, we should set aside the award of the Tribunal and direct it to.
re fix the wages.
" In that case the Tribunal had awarded gratuity related to consolidated wages and without any contest the order of the Tribunal was confirmed.
In Remington Rand of India vs The Workmen(1) it was contended on behalf of the employer that the Tribunal was not justified in awarding gratuity on the basis of consolidated wages and should have awarded it on the basic wages alone.
In dealing with that plea this Court Observed that the Tribunal was on the facts of the case justified in proceeding in that way.
It is not easy to extract any principle.from these cases; as precedents they are conflicting.
If the matter rested there, we could not interfere with the conclusion of the Tribunal, but the Tribunal has failed to take into account the prevailing pattern in the textile industry all over the country.
The textile industry is spread over the entire country, in pockets some large other small.
There are large and concentrated pockets in certain regions and smaller pockets in other regions.
Except in two or three of the smaller States, textile units are to be found all over the country.
It is a country wide industry and in that industry, except in one case to be presently noticed, gratuity has never been granted on the basis of consolidated wages.
Out of 39 centres in which the textile industry is located there is no centre in which gratuity.
payable to workmen in the textile industry pursuant to awards or settlements is based on consolidated wages.
In the two principal centres viz., Bombay and Ahmedabad, schemes for payment .of gratuity to workmen in the textile industry the rates of gratuity are related to basic wages.
The B.C.M. have tendered before the Tribunal a chart setting out the names of textile units in which the gratuity is paid to the workmen on basic wages.
These are the Textile Units, Bhavnagar (Gujarat) Shahu Chhatrapati Mills, Kolhapur (Maharashtra); Jivajirao Cotton Mills, Gwalior (Madhya Pradesh); Madhya Pradesh Mill owners Association, (Indore), Bombay, Ahmedabad (Gujarat); New Sherrock Spg.
& Wvg.
Co. Ltd. Nadiad (Gujarat); Raja Bahadur Motilal Mills, Poona (Maharashtra); Shree Gajanan Wvg.
Mills, Sangli (Maharashtra); T.I.T. Bhiwani (Haryana); Jagatjeet Cotton Mills, Phagwada (Punjab); 36 Textile Mills in West Bengal; and Umed Mills (Rajasthan).
It is true that the chart does not set out the gratuity schemes, if any, in all the 39 centres referred to in the Report of the First Wage Board, but the chart relates to a fairly representative segment of the industry.
No evidence has been (1) [1968] I L.L.J. 542.
Cl/69 4 330 placed before the Court to prove that in determining gratuity payable under any other scheme in a textile unit the rate is related to consolidated wages.
The two large centres in which the industry is concentrated are Bombay and Ahmedabad.
In Rashtriya Mill Mazdoor Sangh, Bombay, vs Millowners Association Bombay(1), a scheme was framed by the Industrial Court, exercising power under the Bombay Industrial Relations Act 11 of 1947, in which the quantum of gratuity was related to the basic wages alone.
In paragraph 27 at p. 583 the Tribunal rejected the argument advanced by counsel for the workmen that since benefits like provident fund, retrenchment compensation, State Insurance Scheme, are granted in terms of monthly wages, gratuity should also be related to consolidated wages.
They observed that in a large majority of awards of the Labour Appellate Tribunals and Industrial.
Tribunals gratuity had been awarded in terms of basic wages, and that, "The basic wages reflect the differentials between the workers more than the total wages, as dearness allowance to all operatives is paid at a flat rate varying with the cost of living index.
The gratuity schemes for the supervisory and technical staff as well as for clerks are also in terms of basic wages.
" They accordingly related gratuity with the average basic wage earned by the workman during the twelve months preceding death, disability, retirement, resignation or termination of service.
The scheme in the Bombay region was adopted in the dispute between the Textile Labour Association and the Ahmedabad Mill Owners Association.
The award is reported in the Textile Labour Association, Ahmedabad vs Ahmedabad Millowners ' Association(2).
The question whether gratuity should be fixed on the basis ,of consolidated wages was apparently not mooted, but it was accepted on both the sides that gratuity should be related to basic wages.
An appeal against that decision in the Ahmedabad Millowners ' Association case(2) was brought before this Court in Bharatkhand Textile Manufacturing Co. Ltd. 's case(3), but no objection was raised to the award relating gratuity to basic wages.
In the report of the Central Wage Board for the Cotton Textile Industry, 1959, in paragraph 110 gratuity was directed to be given on the basis.
of wages plus the increases given under paragraph 106, but excluding the dearness allowance.
The only departure from the prevailing pattern to which our attention is invited was made by the Labour Appellate Tribunal in regard to the textile units in the Coimbatore Region: Rajalakshmi Mills Ltd. vs Their Workmen(4).
There was apparently (1) [1967] Industrial Court Reporter 561.
(2) [1958] I L.LJ. 349.
(3) ; (4) [1957] II L.L.J. 426.
331 no discussion on the question about the basis on which gratuity should be awarded.
The Labour Appellate Tribunal observed: 2. "In all the appeals there is a contest by the mills on the subject of gratuity, and it is contended that the gratuity as awarded is too high.
Both sides had much to say on the subject of the gratuity scheme as given by the adjudicator.
During the course of the hearing we indicated to the parties the lines on which the gratuity scheme could be suitably altered to meet their respective points of view.
We accordingly give the following scheme in substitution of the scheme at Para 85 of the award: 'All persons with more than five years and less than ten years ' continuous service to their credit, on termination of their service by the company, except in cases of dismissals for misconduct involving moral turpitude, shall be p.aid gratuity at the rate of ten days ' average rate of pay inclusive of dearness allowance for each completed year of service. ' . . . . . ." But this award was modified later by the Industrial Tribunal in Coimbatore District Mill Workers ' Union and Others vs Rajalakshmi Mills Co. Ltd.(1) The earlier award made in 1957 was sought to be reviewed before the Industrial Tribunal.
The Tribunal observed that it would be the duty of the Tribunal to modify a gratuity scheme based upon some agreement or settlement if the terms of that agreement are found to be onerous and oppressive.
The Tribunal stated that the original scheme was not applicable to all the units and taking into consideration the statutory provident fund scheme and "the fact that recently basic wages and dearness allowance have leaped up", there was No. justification for including the dearness allowance in any new scheme that might be framed for the new Mills; and that it would be most undesirable to have two sets of gratuity schemes in the same region with varying rates.
In the view of the Tribunal there should be a uniform scheme for all the Mills, old and new, and on that ground also the retention of the dearness allowance under the old scheme must be refused.
Counsel for the workmen relied upon an award made by the Industrial Tribunal in the Chemical Unit belonging to the D.C.M. which is published in D.C.M. Chemical Works vs Its Workmen(2).
In that case gratuity was related to consolidated wages.
The unit though belonging to the D.C.M. is entirely independent of the tex (1) [1964] I L.L.J. 638.
(2) [1962] 1L.L.J. 388.
332 tile unit.
The Company was treating that unit as separate from the textile unit and distinct for the purpose of recruitment of lab.our, sales and conditions of service for the workmen employed therein.
The Chemical Unit had separate muster rolls for its employees and transfers from one unit to.
the other, even where such transfers were possible, considering the utterly different kinds of businesses carried on in the different units, usually took place with the consent of the employee concerned.
In upholding the gratuity scheme which was based on the consolidated wages, this Court observed: "As to the burden of the scheme, we do not think that, looking at it from a practical point of view and taking into account the fact that there are about 800 workmen in all in the concern, the burden per year would 'be very high, considering that the number of retirements is between three to four per centum of the total strength." The gratuity scheme was in a chemical unit, and not in a textile unit.
The judgment of this Court merely affirmed the award of the Tribunal and sets out no reasons why gratuity should be related to consolidated wages.
We do not regard the affirmance by this Court of the award of the Industrial Tribunal as an effective or persuasive precedent justifying a variation from the normal pattern of gratuity schemes in operation in the textile industry all over the country.
It is clear that in the gratuity schemes operative at present to which our attention has been invited, in force in the textile industry payment of gratuity is related not to consolidated wages but to basic wages.
It is true that under the scheme which is in operation in the D.C.M. and S.B.M. payment which is related to the length of service may in some cases exceed the maximum awardable under a scheme of gratuity benefit related to basic wages.
That cannot be a ground for making a vital departure from the prevailing pattern in the other textile units in the country.
But it may be necessary to protect the interest of the members governed by the original scheme.
Determination of gratuity is not based on any definite rules.
In each case it must depend upon the prosperity of the concern, needs of the workmen and the prevailing economic conditions, examined in the light of the auxiliary benefits which the workmen may get on determination of employment.
If all over the country in the textile centres payment of gratuity is related to the basic wages and not on consolidated wages any innovation in the Delhi region is likely to give rise to serious industrial disputes in other centres all over the country.
The award if confirmed would not ensure industrial peace: it is likely to foment serious unrest in 333 other centres.
If maintenance of industrial peace is a governing principle of industrial adjudication, it would be wise to maintain a reasonable degree of uniformity in the diverse units all over the country and not to make a fundamental departure from the prevailing pattern.
We are, therefore, of the view that the Tribunal 's award granting gratuity on the basis of consolidated wage cannot be upheld.
Tiffs modification will not, however, affect the existing benefits which are available under the schemes framed by the D.C.M. and S.B.M. insofar as those two units are.
concerned.
Mr. Ramamurthi for the workmen also.
contended that in the matter of relating gratuity to wages consolidated or basic the principle of region cum industry should be applied and an "overall view of similar and uniform conditions in the industry ' in different centres" should not be adopted.
It was also urged that the basic wage is very low and the class of wage to which gratuity was related played a very important part in the determination of gratuity.
The basic wage is however low in all the centres and if it does not play an important part in other centres, we see no reason why it should play only in the Delhi region a decisive part so as to make a vital departure from the scheme in operation in the other centres in the country.
We are strongly impressed by the circumstance that acceptance of the award of the Tribunal in the present case is likely to create conditions of great instability all over the country in the textile industry.
In that view, we decline to uphold the order of the Tribunal fixing gratuity on the basis of consolidated wages inclusive of dearness allowance.
We may refer to the contentions advanced by counsel for the workmen in the two appeals filed by them.
It was urged,, that the Tribunal was in error in denying to the workmen gratuity when employment is determined on the ground of misconduct.
It was urged that it is now a rule settled by decisions of this Court that the employer is bound to pay gratuity notwithstanding termination of employment on the ground of misconduct.
It may be noticed that in the Rashtriya Mill Mazdoor Sangh 's case(1) and in the Ahmedabad Millowners ' Association case(2) provision was expressly made denying gratuity to the workmen dismissed for misconduct.
But in later cases a less rigid approach was adopted.
In Garment Cleaning Works case(3) tiffs Court observed: "On principle, if gratuity is earned by an employee for long and meritorious service, it is difficult to understand why.
the benefit thus earned by long and meritorious service should not be available to the employee even though at the end of such service he may have been found guilty of misconduct which entails his dismissal.
Gratuity is not paid to the employee gratui (1) [1957] Industrial Court Reporter, 561.
(2) [1958] I L.L.J. 349.
(3) 334 tously or merely as a matter of boon.
It is paid to him for the service rendered by him to the employer, and when it is once earned, it is difficult to understand why it should necessarily be denied to him whatever may be the nature of misconduct of his dismissal.
" In later judgments also the Courts upheld the view that the denial of the right to gratuity is not justified even if employment is determined for misconduct.
In Motipur Zamindari (P) Ltd. vs Their Workmen ( 1 ), this Court opined that the workmen should not be wholly deprived o.f the benefit earned by long and meritorious service, even though at the end of such service he may be found guilty of misconduct entailing his dismissal, and therefore the condition in a gratuity scheme that no gratuity should be payable to a workman dismissed "for misconduct involving moral turpitude" should be held unjustified.
The Court therefore modified the condition and directed that while paying gratuity to a workman who was dismissed for misconduct only such amount should be deducted .from the gratuity due to him in respect of which the employer may have suffered loss by the misconduct of the employee.
A similar view was expressed in Remington Rand of India Ltd. 's case (2).
In Calcutta Insurance Company Ltd. 's case(3) however protest was raised against acceptance of this rule without qualification.
Mitter, J., observed at p. 9 that it was difficult to concur in principle with the opinion expressed in the Garment Cleaning Works case(4).
Mitter, J., observed: "We are inclined to think that it (gratuity) is paid to a workman to ensure good conduct throughout the period he serves the employer. 'Long and meritorious service must mean long and unbroken period of service meritorious to the end.
As the period of service must be unbroken, so must the continuity of meritorious service be a condition for entitling the workman to gratuity.
If a workman commits such misconduct as causes financial loss to his employer, the employer would, under the general law, have a right of action against the employee for the loss caused, and making a provision for withholding payment of .gratuity where such loss was caused to the employer does not seem to aid to the harmonious employment of labourers or workmen.
Further, the misconduct may be such as to undermine the discipline in the workers a case in which it would be extremely difficult to assess the financial loss to the employer.
" (1) [1965] II L.L.J. 139.
(2) [1968] I L.L.J. 542.
(3) [1967] II L.L.J. 1.
(4) 335 "Misconduct" spreads over a wide and hazy spectrum of industrial activity: the most seriously subversive conduct rendering an employee wholly unfit for employment to mere technical default are covered thereby.
The parliament enacted the , which by section 15 has authorised the appropriate Government to make rules to carry out the purposes of the Act and in respect of additional matters to be included in the Schedule.
The Central Government has framed certain model standing rules by notification dated December 18, 1946, called 'The Industrial Employment (Standing Orders) Central Rules, 1946 '.
In Sch.
I Model Standing Orders cl. 14 provides: (1) . . . . . . (2) A workman may be suspended for a period not exceeding four days at a time, or dismissed without notice or any compensation in lieu of notice, if he is found to be guilty of misconduct.
(3) The following acts and omissions shall be treated as misconduct : (a) wilful insubordination or disobedience, whether alone or in combination with others, to any lawful and reasonable order of a superior, (b) theft, fraud or dishonesty in connection with the employer 's business or property, (c) wilful damage to or loss of employer 's goods or property, (d) taking or giving bribes.
or any illegal gratification, (e) habitual absence without leave or absence without leave for more than 10 days, (f) habitual late attendance, (g) habitual breach of any law applicable to the establishment, (h) riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline, (i) habitual negligence or neglect of work, (j) frequent repetition of any act or omission for which a fine may be imposed to a maximum of 2 per cent of the wages in a month, (k) striking work or inciting.
others to strike work in contravention of the provisions of any law, or rule having the force of law." ' 336 A bare perusal of the Schedule shows that the expression "misconduct" covers a large area of human conduct.
On the one hand are the habitual late attendance, habitual negligence and neglect of work: on the other hand are riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline, wilful insubordination or disobedience.
Misconduct falling under several of these latter heads of misconduct may involve no direct loss or damage to the employer, but would render the functioning of the establishment impossible or extremely hazardous.
For instance, assault on the Manager of an establishment may not directly involve the employer in any loss or damage which could be equated in terms of money, but it would render the working of the establishment impossible.
One may also envisage several acts of misconduct not directly involving the establishment in any loss, but which are destructive of discipline and cannot be tolerated.
In none of the cases cited any detailed examination of what type of misconduct would of would not involve to the employer loss capable of being compensated in terms of money was made: it was broadly stated in the eases which have come before this Court that notwithstanding dismissal for misconduct a workman will be entitled to gratuity after deducting the loss occasioned to the employer.
If the cases cited do not enunciate any broad principle we think that in the application of those cases as precedents a distinction should be made between technical misconduct which leaves no trail of indiscipline, misconduct resulting in damage to the employer 's property, which may be compensated by forfeiture of gratuity or part thereof, and serious misconduct which though not directly causing damage such as acts of violence against the management or other employees or riotous or disorderly behaviour, in or near the place of employment is conducive to grave indiscipline.
The first should involve no forfeiture: the second may involve forfeiture of an amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third may entail forfeiture of gratuity due to ' the workmen.
The precedents of this Court e.g. Wenger & Co. vs Its Workmen(1), Remington Rand of India Ltd. case(2) and Motipur Zamindari (P) Ltd. 's case(a) do not compel us to hold that no misconduct however grave may be visited with forfeiture of gratuity.
In our judgment, the rule set out by this Court in Wenger & Co. 's case(1) and Motipur Zamindari (P) Ltd. 's case(3) applies only to those cases where there has been by actions wilful or negligent any loss occasioned to the property of the employer and the misconduct does not involve acts of violence against the management or other employees, or riotous or dis (1) [1963] II L.L.J. 403.
(2) [1968] I L.L.J. 542 (S.C.).
(3) [1965] II L.L.J. 139 (S.C.).
337 orderly behaviour in or near the place of employment.
In these exceptional cases the third class of cases the employer may exercise the right to forfeit gratuity: to hold otherwise would be to put a premium upon conduct destructive of maintenance of discipline.
It was urged on behalf of the workmen that the minimum period of 15 years fixed for voluntary retirement is too long and it should be reduced to 10 years.
In Hume Pipe Co. Ltd. vs Their Workmen(1) and Hydra (Engineers) Private Ltd. vs The Workmen(2) the minimum period for qualifying for gratuity on voluntary retirement was fixed at 15 years.
In other cases a shorter period of 10 years was adopted: Garment Cleaning Works(a); British Paints (India) Ltd.(4); Calcutta Insurance Co. Ltd.(5), and Wengel & Company(x).
Counsel for the employers have accepted that qualifying length of service for voluntary retirement should be reduced to 10 years.
Counsel for the employers have also accepted that having regard to all the circumstances, notwithstanding the direction given by the Tribunal and the schemes prevailing in the other parts of the country in the textile industry, the maximum gratuity should not exceed 20 months ' basic wages and not 15 months ' as directed by the Tribunal.
Further counsel for the D.C.M. and S.B.M. have agreed that in case of termination of employment on voluntary retirement one full months basic wages for each completed year of service not exceeding 20 months ' wages should be granted to workmen.
Counsel for the B.C.M. has agreed that gratuity at the rate of 21 days ' wages for each completed year of service in case of voluntary retirement or resignation after 10 years ' service may be awarded as gratuity to the workmen.
Counsel for the A.T.M. has shown no disinclination to fall in line with this suggestion.
Counsel for the A.T.M. has also not objected to appropriate adjustments in view of the concessions made by the management of the D.C.M., S.B.M. and B.C.M.
It was urged by counsel for the workmen that in providing that gratuity shall be paid to Badli workmen for only those years in which a workman has worked for 240 days, the Tribunal has committed an error.
It was urged that a Badli workman has to register himself with the management of the textile unit and is required every day to attend the factory premises for ascertaining whether work would be provided to him, and since a Badli workman has to remain available throughout the year when the factory is open, a condition requiring that the Badli workman has worked for not less than 240 days to qualify for gratuity is unjust.
We (1) [1959] II L.L.J. 830.
(2) C.A. No. 1934 of 1967 decided on April 30, 1968.
(3) (4) [1966] I L.L.J. 407 (S.C.) (5) [1967] II L.L.J. 1 (S.C.).
(6) [1963] II L.L.J. 403 (S.C.) 338 are unable to agree with that contention.
If gratuity is to be paid for service rendered, it is.
difficult to appreciate the grounds on which it can be said that because for maintaining his name on the record of the Badli workmen, a workman is required to attend the Mills he may be deemed to have rendered service and would on that account be entitled also to claim gratuity.
The direction is unexceptionable and the contention must be rejected.
It was also urged by Mr. Ramamurthi that the expression "average of the basic wage" in the definition of "wages" in cl. 4 of the Schemes is likely to create complications in the implementation of the Schemes.
He .urged that if the wages earned by a workman during a month are divided by the total number of working days, the expression "wages" will have an artificial meaning and especially where the workman is old or disabled or incapacitated from rendering service, gratuity payable to him will be substantially reduced.
We do not think that there is any cause for such apprehension.
The expression "average of the basic wage" can only mean the wage earned by a workman during a month divided by the number of days for which he has worked and multiplied by 26 in order to arrive at the monthly wage for the computation of gratuity payable.
Counsel for the employers agree to this interpretation.
It was then urged that whereas the reference to.
the Industrial Tribunal was made by the Delhi Administration sometime in March 1958, the award is .given effect to from January 1, 1964, and for a period of nearly six years the workmen have been deprived of gratuity, when the delay in the disposal of the proceedings was no.t due to.
any fault or delaying tactics on the part of the workmen.
The reference was made in the first week of March, 1958.
The Textile Mazdoor Union then applied to be impleaded on September 15, 1958, the D.C.M. and S.B.M. moved the High Court of Punjab at Delhi and obtained an order for stay of proceedings in writ petition filed against the order of the Tribunal impleading the Textile Mazdoor Union.
That writ petition was dismissed in February 1961 and the proceedings were resumed on December 12, 1962.
Thereafter preliminary issues were decided and on December 3, 1963, ,an interim award relating to other disputes was made.
It must, however, be noticed that there were four claims and the claim relating to gratuity was taken in hand by the Tribunal after disposal of the other claims.
Neither party was dilatory in the prosecution of any claim before the Tribunal.
It has also to be noticed that in the D.C.M. and S.B.M. there was in fact a gratuity scheme already in operation.
The liability of the A.T.M. to pay gratuity arises after that unit acquired sufficient financial stability and it is not suggested that the unit had acquired financial stability before January 1, 1964.
The is.sue remains a live issue only in respect of the B.C.M.
It is true that the gratuity 339 scheme of the D.C.M., and S.B.M. was related only to the length of service and did not take into account the varying rates of wages received by the workmen.
But the question if at all would, be one of making minor adjustments in the liability of the two units to pay gratuity in the event of gratuity being payable under this award at a higher rate than the gratuity awardable under the scheme already in operation in the two units.
If in respect of the A.T.M. which had no scheme gratuity for all practical purposes becomes operative from January 1, 1964, we do not see any reason why in respect of the B.C.M. any different rule should be provided for.
Again, the Tribunal has fixed January 1, 1964, as the date for the commencement of the schemes.
Giving the schemes effect before January 1, 1964, may rake up cases.
in which the workmen have left the establishments many years ago.
It would not be conducive to industrial peace to allow such questions to be raised after this long delay.
The question is not capable of solution on the application of any principle and must be decided on the consideration of expediency.
We do not think that any ground is made out for altering the award of the Industrial Tribunal in this behalf.
It was then urged that in any event the workmen of the D.C.M. and S.B.M. should not be deprived of the right to gratuity under the scheme of the two u,nits, if gratuity at a higher rate is payable to them under the voluntary scheme.
This contention must be accepted.
We direct that in respect of all workmen of the D.C.M. and S.B.M. who were employed before January 1, 1964, and continued to remain employed till that date, gratuity at the higher of the two rates applicable to each workman when he becomes entitled to gratuity either computed under the Employees Benefit Fund Trust scheme of the D.C.M. and S.B.M. or under the terms of this award shall be paid.
Workmen employed after January 1, 1964, will be entitled to the benefit of this award alone.
Industrial disputes have given rise to considerable strife holding up development of industry and the economic welfare of the nation.
Awards have been made by the Tribunals often on considerations adhoc and based on no principle and Courts have upheld or modified those awards without enunciation of any definite or generally accepted principle.
In the present case we have been largely guided b37 the consideration of securing a reasonable degree of uniformity in the fixation of gratuity in the textile industry, for, in our view, a departure made from the prevailing pattern in one region is likely to give rise to claims all over the country for modification of the gratuity schemes in operation, and have been accepted as fixing the basis.
of gratuity schemes.
If having regard to the deteriorating value of the rupee, it is thought necessary that more generous benefits should be available to the 340 workmen by way of gratuity, the remedy lies not before the adjudicators or the Courts, but before the legislative branch of the State.
In respect of the bonus, provident fund, retrenchment compensation, State Insurance Schemes as well as medical benefits, legislation has been introduced bringing a reasonable degree of certainty in the laws governing the various benefits available to the workmen and we are of the view that even in respect of gratuity a reasonably uniform scheme may be evolved by the Legislatures which could prevent resort to the adjudicators in respect of this complicated matter of dispute between the employers and the employees.
It may no.t be difficult to evolve a scheme which would meet the legitimate claims.
of both the employers and the employees and which might, while eliminating cause for friction, ' simultaneously conduce to greater certainty in the administration of the law governing industrial disputes, and secure benefits to the employers as well as the employees and conduce to the prosperity of the industry as well as of the workmen.
We propose to summarise the effect of our judgment: (1) A unit wise approach in framing the gratuity scheme for the four units was appropriate, and on the terms of the reference the plea of the employers to fix the age of superannuation was beyond the scope of reference.
The financial condition of the D.C.M., S.B.M. and B.C.M. justifies imposition of gratuity schemes as from January 1, 1964.
Even the A.T.M. which is the weakest of the four units is financially stable from the date on which the award becomes operative; (2) The settlement between the workmen and the A.T.M. did not operate to bar the jurisdiction of the Tribunal to make the scheme of gratuity payable to the workmen of the A.T.M.; (3) That the Tribunal was in error in relating gratuity awardable to the workmen to the consolidated wage; (4) That the minimum period for .
qualifying for voluntary retirement should be reduced to 10 years and one months basic wage in the case of D.C.M. and S.B.M. and 21 days ' basic wage in the case of B.C.M. and A.T.M. for each completed year of service should be paid but not exceeding 20 months wages in the aggregate.
(This direction is made with the consent of the Advocates of the employers); 341 (5) That workmen dismissed or discharged from service for misconduct will not be entitled to gratuity if guilty of conduct involving acts of violence against the management or other employees, or riotous or disorderly behaviour in or near the place of employment; (6) No modification need be made with regard to Badli workmen; (7) The award needs no modification with regard to the date of operation of the award; and (8) The workmen of the D.C.M. and S.B.M. who commenced service and continued to serve till January 1, 1964, and thereafter will be entitled to elect at the time when gratuity becomes due to claim gratuity either on the scheme in force under the Employees Benefit Fund Trust of the employers or under this award.
We have made some incidental changes to streamline the scheme.
On the view we have taken of the schemes, Annexure 'A 'relating to the D.C.M. and S.B. M. of the award will be modified in the following respects: In clause 1 (a) instead of "12 days ' wages", the expression "20 days ' wages" will be substituted; In clause 1 (b) for the expression "15 days ' wages", the expression "1 month 's wages" will be substituted; In proviso (ii) to clause 1 for the expression "15 months ' wages", the expression "20 months ' wages" will be substituted; In clause 2 for the expression.
"15 days ' wages", the expression "1 months wages will be substituted; and for the expression ' 15 years service , 10 years service will be substituted; In the proviso to clause 2 for the expression "15 months ' wages", the expression "20 months ' wages" will be substituted; In clause 3 in the proviso for the expression "15 months ' wages", the expression "20 months ' wages" will be substituted; Clause 3 will be followed by an Explanation: "Explanation.
The expression "misconduct" means acts involving violence against the management or other employees, or riotous or disorderly behaviour in or near the place of employment.
342 Where the workman is guilty of conduct which involves the management in financial loss, the loss occasioned may be deducted from the gratuity payable." In clause 4 the words "plus the dearness allowance" will be omitted.
The remaining clauses will stand unaffected except that for the words "within six months from the date of publication of this Award" ' the words "within six months from the date of this judgment" will be substituted.
Annexure 'B ' relating to the B.C.M. and A.T.M. will be modified in the following respects: In clause 1 (a) for the expression "one fourth month 's wages", the expression "15 days ' wages" will be substituted; In clause 1 (b) for the expression "one third month 's wages", the expression "21 days ' wages" will be substituted; In the proviso for the expression "12 months ' wages", the expression "20 months ' wages" will be substituted; In clause 2 for the words "15 years ' service", the expression "10 years ' service" will be substituted; In clause 3 in the proviso for the expression "12 months ' wages", the expression "20 months ' wages" will be substituted and it will be followed by the Explanation of "misconduct" as in Annexure 'A '.
In clause 4 the words "plus the dearness allowance" will be omitted.
There will be no order as to costs in these appeals.
V.P.S. Award modified accordingly. | In the Delhi region there are four textile units.
namely, the D.C.M., the S.B.M., the B.C.M., and the A.T.M. The D.C.M. and the S.B.M. are under one management.
Since 1940 they had also a common retirement benefit scheme with a scale of gratuity.
The ' workmen in all the units were receiving basic wages plus dearness allowance.
On March 4, 1958, an industrial dispute between the four units and their workmen was referred to the Industrial Tribunal and one of the matters in dispute related to gratuity.
The Tribunal in its award framed two schemes relating to the payment of gratuity, one relating to D.C.M. and S.B.M., and the other, to B.C.M. and A.T.M. They were made operative from January 1, 1964.
Both employers and employees appealed to this Court.
On the questions: (1 ) Whether in view of a settlement between the management of A.T.M. and its workmen it was open to the Tribunal to ignore the settlement and impose the scheme on the management; (2) Whether in view of the unstable financial condition of A.T.M. the burden of payment of gratuity on A.T.M. was excessive; (3) Whether a uniform scheme applicable to the entire industry on the region cum industry basis should have been adopted instead of schemes applicable to individual units; (4) Whether in determining the quantum of gratuity, basic wage alone should be taken into account and not the consolidated wage including dearness allowance; (5) Whether in deciding this question, an overall view of similar and uniform conditions in the industry in different centers in the country, could he taken into consideration; (6) Whether it was not necessary for the Tribunal to fix the age of superannuation when introducing a gratuity scheme; (7) Whether gratuity should have been awarded even in cases of dismissal for misconduct; (8) Whether provision should have been made for payment of gratuity to badli workmen irrespective of the number of days for which they worked in a year; (9) Whether the schemes should have been made operative from the date of reference; and (10) What is the scope of the expression 'average of the basic wage '.
HELD: (1) The settlement between the workmen and management of A.T.M. did not bar the jurisdiction of the Tribunal to make the Scheme of gratuity applicable to A.T.M. [340] Under the settlement all that was agreed to was, that an award should be made and if it he found that A.T.M. acquired financial stability then it would be liable to pay the gratuity to its workmen.
It was not agreed that the proceedings before the Tribunal should be dropped and that it 308 was only after A.T.M. became financially stable that a fresh claim should be made by the workmen.
[320 D F] (2) The trading accounts of A.T.M. showed that since 1959 60 the Mills had achieved some stability, and that by 1961 62 all previous losses were wiped out.
Therefore, though it was a much weaker unit than the others, it was financially stable from the date on which the scheme became operative.
[321 A C] (3) A unit wise approach in framing the gratuity scheme 'for the four units was appropriate in the present case.
[323 B C; 340 D E] No inflexible rule has been laid down by this Court that gratuity schemes should he framed only on the region cure industry principle.
In the present case, if a common scheme was framed for the entire industry in Delhi for all four units, in view of the financial condition of A.T.M., the benefits under such a scheme would be not only low, but would be lower than the existing benefits available to workmen in the D.C.M. and S.B.M. Units.
[321 C D, H; 322 E F, H] Garment Cleaning Works vs Its Workmen, [1962] 1 S.C.R. 711: and Burhanpur Tapti Mills Ltd. vs Burhanpur Tapti Mills Mazdoor Sangh, , followed.
Bharatkhand Textile Mfg. Co. vs Textile Labour Association ; , explained.
(4) The Tribunal was in error in relating the gratuity awardable to the workmen to the consolidated wage instead of the basic wage.
[340 G] (a) In determining the scope of an industrial reference words used, either in the claim or in the order of reference, should not necessarily be given the meaning they have under the Industrial Disputes Act.
Therefore, merely because the expression "wages" in the Act includes dearness allowance, the Tribunal could not base the gratuity scheme on consolidated wages.
[325 D F] (b) An industrial tribunal cannot adjudicate on disputes not referred; but when called upon to adjudicate ' whether a certain scheme, on the terms indicated in the reference should be framed, such basic guidance does not limit its jurisdiction.
The Tribunal, in this case, was in error in thinking that in determining the rate of gratuity it was limited to the number of days of service in the order of reference as the applicable multiple.
On that assumption, since the gratuity would be too low if only basic wage was chosen, it was not justified in choosing consolidated wage.
The proper procedure would have been to choose only the basic wage and fix upon a larger number of days of service as the appropriate multiple.
[327 E H] (c) The decisions of this Court in May and Baker (India) Ltd. vs their Workmen, [1961] II L.L.J. 94 (S.C.), British India Corporation vs Its Workmen, [1965] II L.L.J. 556 (S.C.), British Paints (India) Ltd. vs Its Workmen, , Hindustan Antibiotics Ltd. vs Their Workmen, and Remington Rand of India vs The Workmen, are conflicting and no principle can be extracted as to whether basic wage or consolidated wage should be considered for purposes of gratuity.
Ordinarily, in those circumstances, this Court would not have interfered with the conclusion of the Tribunal choosing consolidated wage; but, the Tribunal had failed 309 to take into account the prevailing pattern in the textile industry all over the country.
It is country wide industry and in that industry, gratuity has never been granted on the basis of consolidated wages.
[329 C F; 330 A] (d) The primary object of industrial adjudication is to adjust the relations between employers and employees with the object of promoting industrial peace.
If the basic wage alone is taken for purposes of gratuity, it would produce in the present case, a scheme which deprives the workmen of the D.C.M. and S.B.M. of benefits which had been granted to them under the voluntary scheme introduced by the management of those two units and disturb industrial peace therein.
But on that account, the Tribunal was not justified in introducing a fundamental change in the concept of gratuity granted by numerous schemes in the textile industry all over the country.
The appropriate remedy is to frame a scheme consistent with the normal pattern prevailing in the industry and introduces reservations protecting benefits already acquired.
[326 C F] (e) In the report of the Central Wage Board for the cotton textile industry, also, gratuity was directed to be given on the basis of wages excluding dearness allowance.
[330 G] (f) In D. C.M. Chemical Works vs Its Workmen, this Court affirmed the award relating gratuity to consolidated wages.
Though the unit also belonged to D.C.M. it is a unit entirely independent of the textile unit.
So, it cannot be regarded as an effective or persuasive precedent justifying variation from the normal pattern of gratuity schemes in operation in the textile industry all over the country.
[331 H; 332 A B, D E] (5) If all over the country, in textile centres, payment of gratuity.
is related to the basic wage and not to the consolidated wage any innovation Delhi region alone is likely to give rise to serious industrial disputes in other centres in the country.
If maintenance of industrial peace is a governing principle of industrial adjudication, it would be wise to maintain a 'reasonable degree of uniformity in the diverse units all over the country and not to make a fundamental departure from the prevailing pattern.the basic wage is low in all other centres, and if it does not play an important part, there is no reason why it should play, only in the Delhi region, a decisive part so as to make a vital departure from schemes in operation in other centres in the country.
The acceptance of the award the Tribunal in the present case is likely to create conditions of great instability in other parts of the country in the textile industry.
Therefore, the Tribunal 's award granting gratuity on the basis of consolidated wage could not be upheld.
[332 G H; 333 A E] (6) It is not necessary, for a gratuity scheme to be effective, that here should be fixation of the age of superannuation.
[323 C D] Burhanpur Tapti Mills Case, , referred Further, on the terms of the reference the plea of the employers to fix the age of superanuation was beyond the scope of the 'reference, nor was such fixation incidental to the framing of the scheme.
[323 H 324 c] (7) The object of providing a gratuity scheme is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer.
It is therefore not correct to say that no misconduct, however grave, may not be visited with forfeiture of gratuity.
Misconduct could be (a) 310 technical misconduct which leaves no trail of indiscipline; (b) misconduct resulting in damage to the employers ' property which may be compensated by forfeiture of gratuity or part thereof; and (c) serious misconduct such as acts of violence against the management or other employees or riotous or disorderly behaviour in or near the place of employment which, though not directly causing damage, is conducive to grave indiscipline.
The first should involve no forfeiture, the second may involve forfeiture of an amount equal to the loss directly suffered by the employer in consequence of the misconduct, and the third will entail forfeiture of gratuity due to the workmen.
[324 F G; 336 D F; 341 A B] Garment Cleaning Works vs Its Workmen, ; (1961) I L.LJ. 513, Wenger & Ca.
vs Its Workmen, [1963] II L.L.J. 403 (S.C.), Motipur Zamindari (P) Ltd. vs Their Workmen, [1965] II L.LJ.
139 (S.C.) Calcutta Insurance Co. vs Their Workmen, [1967] II L.LJ. 1 (S.C.), and Remington Rand of India vs The Workmen, [1968] I L.L.J. 542 (S.C.).
referred to.
(8) The award does not require to be modified with regard to badli workmen.
If gratuity is to be paid )for service rendered then there are no grounds for holding that a badli workman must be deemed to have rendered service giving rise W a claim of gratuity, merely because, for maintaining his name on the record of the badli workmen, he is required to attend the mills.
[338 A B] (9) The award needs no modification with regard to the date of commencement of the schemes.
The liability of A.T.M. to pay gratuity arose after it acquired sufficient financial stability and the unit acquired financial stability only from January 1, 1964.
If in respect of the A.T.M. which had no scheme.
gratuity becomes operative from January 1, 1964, there is no reason why respect of B.C.M. any different rule should be provided for.
As regards D.C.M. and S.B.M. there was already a more advantageous gratuity scheme in operation and the workmen in those two units were not prejudiced by directing the scheme applicable to them, to commence from January 1, 1964.
If effect was given to the schemes before January 1, 19 '64, it may rake up cases in which workmen have left the establishment many years ago and it would not be conducive to industrial peace to allow such questions to be raised after a long delay.
In the absence of any principle, the matter must be decided on considerations of expediency.
[338 G H; 339 A D] (10) The expression 'average of the basic wage ' means wage earned by a workman during a month, divided by the number of days for which he had worked, and multiplied by 26 in order to arrive at the monthly wage for the computation of gratuity payable.
[333 C D] [Appropriate directions modifying the schemes were accordingly given.] |
No. 96 of 1959.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
750 section Shaukat Hussain and P. C. Aggarwala, for the petitioners N. section Bindra, R. H. Dhebar and T. M. Sen, for the respondents.
April 4.
The Judgment of the Court was delivered by SARKAR, J.
This is a petition raising a question of violation of the fundamental right to hold property guaranteed by article 19 (1) (f) of the Constitution.
It arises out of an order made under the , declaring two houses to be evacuee property.
What had happened was that sometime in September, 1951, two notices were issued under section 7 of the Act addressed respectively to Nusrat Ali and Fateh Ali, requiring them to show cause why they should not be declared evacuees and their properties, being the two houses in dispute, to be evacuee property.
Neither of these two persons having appeared, a declaration was made by the Custodian on January 10, 1952, under that section that Nusrat Ali and Fateh Ali were evacuees and the houses were evacuee property.
Upon such declaration the houses vested in the Custodian under the provision of section 8 of the Act and he took possession of them.
These houses were the property of one Khadim Ali who had never been declared an evacuee and had died on or about October 1, 1950, leaving three sons and five daughters, who thereupon became entitled to them in certain shares.
Nusrat Ali and Fateh Ali were two of the sons of Khadim Ali.
The Petitioners are his other son and two of his daughters.
No notice under section 7 had at any time been issued to them nor were they ever declared to be evacuees.
These facts are not in dispute.
The Petitioners contend that they have been wrongly deprived of their rights in the houses by the action of the Custodian.
They say that for a, long time they had no knowledge of the proceedings taken under the Act in respect of the houses and when they came to know of the order of the Custodian, they took various steps to protect their rights but were unsuccessful.
751 One of such steps appears to have been an appeal preferred by the male petitioner on behalf of all the petitioners to the Custodian General against the order of January 10, 1952.
On this appeal being rejected, they moved this Court by the present petition.
The question is whether the Custodian was entitled to declare the entirety of the two houses evacuee property and deprive the petitioners of their rights in them.
It is well established and not disputed, that no property of any person can be declared to be evacuee, property unless that person had first been given a notice under B. 7 of the Act: see Ebrahim Aboobaker vs Tek Chand Dolwani (1).
Admittedly, no such notice had been issued to the petitioners.
Their interest in the houses, therefore, could not have vested in the Custodian.
Learned counsel for the respondents, the officers concerned with evacuee properties, concedes that so far as the female petitioners were concerned, their interest could not in any way be affected by the order made under section 7 of the Act.
He however contends that the male petitioner, Zafar Ali, having filed the appeal to the Custodian General against the order of January 10, 1952, he personally at least, is bound by the order dismissing the appeal, that order being a quasi judicial decision.
It is said that be cannot, there fore, maintain this petition.
We do not think that this contention is well founded.
Zafar Ali was not a patty to the proceeding in which the order in dispute had been made.
Strictly speaking, no appeal by him against that order lay or was necessary.
Then again the appeal did not decide any question as to the right of Zafar Ali to the houses for, it was dismissed on the sole ground that it bad been filed beyond the time prescribed for it.
There was no judicial determination by the Custodian General of any fact affecting Zafar Ali 's right in the houses.
If, as was conceded, Zafar Ali 's share in the houses could not vest in the Custodian without due notice to him, then we are unable to appreciate how the position becomes different because Zafar Ali filed an appeal (1) ; , 702. 752 which was dismissed as time barred and which he need never have filed at all.
The order of January 10, 1952, was without jurisdiction so far as Zafar Ali 's share in the house was concerned, and it remained so in spite of the appeal.
In our view, the appeal furnishes no answer to the claim made in the petition.
As no notice had been issued to the petitioners under section 7, their interest in the two houses never vested in the Custodian.
The acts of the Custodian in so far as they deprive the petitioners of their property cannot be upheld.
It was also said on behalf of the respondents that the properties had already been acquired under the , and therefore the petitioners had, no longer, any claim to them.
Sub section (2) of section 12 of this Act provides that "On the publication of a notification under sub section (1), the right, title and interest of any evacuee in the evacuee property specified in the notification shall, on and from the beginning of the date on which the notification is so published, be extinguished and the evacuee property shall vest absolutely in the Central Government free from all encumbrances.
" It was said that a notification mentioned in this section had been issued.
It seems to us that this section does not affect the petitioners ' rights.
It only affects the rights of an evacuee which the petitioners, on the admitted facts, are not.
We may mention here that the petitioner Zafar Ali claims that his father left a will giving him a larger share in the houses than he would have got on intestacy.
We are not concerned in this case with his rights under the will, if any, and say nothing about them.
In the result, we allow the petition and set aside the order of January 10, 1952, in so far as it affected the rights of the petitioners in the properties concerned.
There will be no order as to costs.
Petition allowed. | The Custodian of evacuee properties made a declaration that two houses were evacuee properties.
Notice under section 7 of the , which initiated the proceedings resulting in the declaration had been served on two persons as owners.
These persons did not appear and contest the proceedings.
The petitioners claimed to be entitled to certain shares in the houses.
No notice under section 7 Of the Act had at any time been served on them and they had never been declared evacuees.
One of the petitioners filed an appeal under the Act to the Custodian General which was dismissed as time barred.
The petitioners then filed a petition under article 32 Of the Constitution of India on the ground that they were being wrongfully deprived of their shares in the houses.
Held, that as no notice under section 7 of the Act had been ser ved on the petitioners, their shares in the houses had never become evacuee property nor vested in the Custodian.
The petitioner who had filed the appeal did not thereby lose his rights in the houses either as the appeal did not decide any question as to such rights but was dismissed on the sole ground that it was filed beyond the time prescribed for it.
Strictly, no appeal by him lay as he was not a party to the proceeding resulting in the declaration.
Section 12 of the , only affects the rights of an evacuee in his property.
The notification made under that section did not have the effect of extinguishing the petitioners ' rights in the houses as they had never been declared evacuees.
Ebrahim Aboobaker vs Tek Chand Dolwani, ; , referred to. |
Civil Appeal No. 23 of 1966.
Appeal from the judgment and decree dated May 11, 1962 of the Patna High Court in Appeal from Original Decree No. 169 of 1958.
U.P. Singh, for the appellants.
Sarjoo Prasad and R.C. Prasad, for respondents Nos. 1 and 2.
The Judgment of the Court was delivered by Bachawat J.
The plaintiffs, defendants 5 to 7 and the ancestor of defendants 8 to 13 were the sixteen anna proprietors of certain villages in district Shahbad.
By a registered deed dated October 3, 1944 they leased the forest rights in the villages to the defendants 1 and 2 for a period of 9 years ending Bhado 30, 1360 Fasli corresponding to September 2, 1953 at an annual.
rent of Rs. 16,000.
The plaintiffs had 6 annas share in the proprietary rights in the villages and Rs. 6,000 was fixed as their share of the annual rent.
The defendant No. 3 was a transferee of a portion of a lessees ' interest from defendant 1.
On September 3, 1954 the plaintiffs instituted a suit claiming a decree against defendants 1 and 2 for Rs. 36,405 on account of their share of the rent for 1356 to 1360 Faslis and interest thereon at 1% per annum.
During the pendency of the suit, defendant 2 died and his heirs were substituted as defendants 2 and 2(a).
The Trial Court decreed the suit on contest against defendants 2 and sup./69 6 362 2(a) and ex parte against defendants 1 and 3 with future interest and costs.
On appeal, the High Court held that (1 ) as defendant 2 had only 4 anna share in the lessees ' interest as mentioned in the lease deed and as he had acquired another one anna share in the lessees interest subsequently, defendants 2 and 2(a) were liable to pay only 5 annas share in the annual rent, that is to say, Rs. 1,875 per annum and defendants 1 and 3 were liable to pay the balance rent; (2) as the lease deed granted a lease of forest rights, the suit was governed by article 2(b)(i) of Schedule III of the Bihar Tenancy Act, 1885 and consequently the suit in respect of rent for 1356 and 1357 Faslis was barred by limitation, and (3) in view of sec.
67 of the Bihar Tenancy Act the plaintiffs could claim interest at the rate of 61/4% per annum only.
Accordingly the High Court allowed the appeal in part and ' passed a decree against defendants 2 and 2(a) for 5 annas share of the rent for 1358 to 1360 Faslis and a separate decree against defendants 1 and 3 for the balance rent for those years with interest at 61/4 % per annum.
The plaintiffs have filed the present appeal after obtaining a certificate from the High Court.
The appellants challenge the correctness of all the findings of the High Court.
Clause 3 of the lease deed provided: "that the lessees shall pay an annual Zama of Rs. 16,000 in respect of the thika property on 1st Kuar of every year.
If for any reason, the rent for two consecutive years shall fall into arrears in that case the lessors shall be competent to enter into khas possession and occupation of the thika property and to this the lessees shall ' have no objection and in case of making default the lessees shall pay an interest at the rate of Re. 1 per cent till the date of payment.
The lessors either separately or jointly shall realise (the amount) to the extent of their respective shares according to their choice by instituting in court with interest thereon mentioned above from the persons and properties of the lessees.
" At the end of the lease it was stated that defendant 1 had twelve anna share in the lessees ' interest and his share of the rent was Rs. 12000.
It was also stated that defendant 2 had 4 anna share in the lessees ' interest and his share of the rent was Rs. 4GO0.
Clause 3 of the deed clearly shows that the lessees were jointly liable to pay the annual rent of Rs. 16000.
The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each of them towards the rent jointly payable by them.
The joint liability of the lessees is clearly indicated by the provision that entire lease 363 would be terminable on default of payment of rent for two consecutive years.
Having regard to sec.
43 of the defendants 1 and 2 were jointly and severally liable to pay the rent.
It was not disputed before the High Court that the liability of defendant 3 stood on the same footing.
The High Court was in error in holding that defendant 2 was liable to pay only 5 anna share in the rent.
The High Court was right in allowing the defendant to raise the point of limitation, though the plea was not taken in the written statement.
Under section 184 of the Bihar Tenancy Act a suit instituted after the expiry of the period of limitation is liable to be dismissed though limitation has not been pleaded learned Counsel for the appellants could not tell us what further evidence his clients could adduce on this point.
In the circumstances, the absence of the plea of limitation in the written statement did not cause the appellants any prejudice.
On a careful reading of the lease deed, we are satisfied that it granted a lease in respect of forest rights only.
It gave the lessees the right to cut and appropriate trees of certain types and the fruits and flowers of certain fruit bearing trees.
The right to open roads and to construct buildings were incidental to the right to enjoy the forest produce.
The suit is for recovery of rent in respect of forest produce and saving regard to sec.
193 of the Bihar Tenancy Act is governed by article 2(b)(i) of the Schedule III thereto.
This view is supported by the decisions of the Calcutta High Court in Abdulullah vs Asraf Ali(1) and Bande Ali Fakir vs
Amud Sarkar(2).
The special period of limitation applies though the claim for arrears of rent is rounded on a registered instrument, (see Mackenzie vs Haji Syed Muhammad Ali Khan.
(3)The High Court was right in holding that the suit in respect of rent for Fasli years 1356 and 1357 was barred by limitation.
Having regard to sec.
193 all the provisions of the Act applied to a suit.
Section 67 (1 ) provides that arrears of rent shall bear simple interest at the rate of 61/4% per annum.
The section overrides the contractual stipulation that the interest would be payable at 1% per annum.
The High Court was right in holding that interest was payable at the rate of 61/4% per annum only.
In the result, the appeal is allowed in part and it is declared that defendants 1, 2, 2(a) and 3 are jointly and severally liable to pay to the plaintiffs Rs. 6000 per annum on account of the plaintiffs ' share of rent for Fasli years 1358, 1359 and 1360 and simple interest thereon at the rate of 61/4% per annum upto date.
We direct that a decree be drawn up accordingly.
The decree will carry future interest on the principal sum at the rate of 6% (1) 7 C.L.J. 152.
(2) 19C.W.N. 415.
(3) I.L.R.19 Cal.
1. 364 per annum.
The aforesaid defendants will pay to the plaintiffs proportionate costs of the suit in the Trial Court.
The parties will bear their own costs of the appeal in the High Court and in this Court.
This decree will be without prejudice to the payments, if any, made by the defendants to the plaintiffs after the institution the suit.
Y.P. Appeal partly allowed. | The plaintiffs defendants 5 to 7 and the ancestor of defendants 8 to 13 leased the forest rights in theft villages to defendants 1 and 2 at an annual rental.
The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each .of them towards the rent jointly payable by them.
It was stated in the lease that the entire lease would be terminable on default of payment of rent for two.
consecutive years and the lessee shall pay interest at Re. 1 per cent in case of default, and that the lessors either separately or jointly shall realise the amount according to their choice.
Defendant 3 was a transferee of a portion of lessees ' interest from defendant 1.
The plaintiff lessors flied a suit in September 1954 claiming a decree of their share of rent for 1356 to 1360 Fasli and interest thereon.
The plea that suit was.
barred by limitation was not taken in the written statement.
Defendant 2 died and his heirs were substituted as defendants 2 and 2(a).
The trial court decreed the suit.
On appeal, the High Court held that (i) the defendants 1 to 3 were liable to pay the amount of the annual rent up to the extent of their respective shares; (ii) as the lease deed granted a lease of forest rights, the suit was governed by article 2(b)(1) of Schedule HI of the Bihar Tenancy Act, 1885 and consequently the suit in respect of rent for 1356 and 1357 Faslis was barred by limitation; and (iii) in view of section 67 of the Bihar Tenancy Act the plaintiffs could claim at the rate of 61/2% per annum only.
In appeal.
this Court, HELD: The defendants 1 to 3 were jointly and severally liable to pay the plaintiff 's share of the rent for 1358, 1359 and 1360 Faslis and simple interest thereon at 61/4% per annum up.
to date.
(i) The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each of them towards the rent jointly payable by them.
The joint liability of the lessees was clearly indicated by the provision that the entire lease would be terminable on default on payment of rent for two consecutive years.
Having regard to section 43 of the defendants 1 and 2 were jointly and severally liable to pay the rent, and the liability of defendant 3 stood on the same footing.
[362 H 363B] (ii) Under section 184 of the Bihar Tenancy Act a suit instituted after the expiry of the period of limitation is liable to be dismissed though limitation is not pleaded.
The respondent was rightly allowed to raise the 361 point of limitation though the plea was not taken in the written statement.
[363 C] The lease deed granted a lease in respect of forest rights only.
It gave the lessees the right to cut and appropriate trees of certain types and the fruits and flowers of certain fruit bearing trees.
The right to open roads and to construct buildings were incidental to the right to enjoy a forest produce.
The suit was for recovery of rent in respect of forest produce and having regard to section 193 of the Bihar Tenancy Act was governed by article 2(b)(1) of the Schedule III therefore.
The special period of limitation applied though the claim for arrears of rent was claimed on a registered document.
[363 D F] The suit in respect of rent for 1356 and 1357 was barred by limitation.
Abdulullah vs Asraf Ali, 7 C.L.J. 152, Bande Ali Fakir vs Amud Sarkar, and Mackenzie vs Haji Syed Muhammad Ali Khan, I.L.R. , approved.
(iii) Interest was payable at the rate of 6 1/4% per annum only.
By section 193 of the Bihar Tenancy Act all the provisions of the Act applied to the suit.
Section 67(1) provides that arrears of rent shall bear simple interest at the rate of 61/2% per annum.
The section overrides the contractual stipulation that the interest be payable at 1% per annum.[363 F G] |
, No. 14 of 1968.
Petition under article 32 of the Constitution of India for enforcement of the fundamental rights.
M.C. Chagla, S.K. Mehta, K.L. Mehta and S.K. Khanna, for the petitioners.
C.K. Daphtary, Attorney General and D.P. Singh, for the respondents.
The Judgment of the Court was delivered by Bachawat,J.
The petitioner company, Mohan Meakin Brewenes Ltd., manufactures and soils Indian made foreign liquor.
Its distilleries are situated at Solan in Himachal Pradesh and at Lucknow and Mohan Nagar in Uttar Pradesh.
It has depots for sale of its products at Patna and Ranchi in the State of Bihar.
Before October 13, 1967 it imported foreign liquor into the State of Bihar from Solan, Lucknow and Mohan Nagar for purposes of sale at its Patna and Ranchi depots on payment of duty at the then current rate of Rs. 14.40 L.P. litres.
Duty on the liquor from Solan was paid upon or before importation by making deposits in the State Bank of India at Patna and Ranchi.
Duty on the liquor from Lucknow and Mohan Nagar was paid upon importation by making deposits with the Uttar Pradesh Government. ' By a notification, dated October 13, 1967 duty on foreign liquor was enhanced from Rs. 14.40 to Rs. 26.20 per L.P. litres with effect from November 1, 1967.
By an order, dated January 3, 1968 the Superintendent of Excise, Patna, directed the Company to pay by January 31, 1968 the difference in duty on the opening balance of India made foreign liquor in its stock on November 1, 1967.
In this writ petition under article 32 of the Constitution the Company challenges the legality of the levy.
Duty on foreign liquor imported into the State of "Bihar is chargeable under section 27(1)(a) of the Bihar and Orissa Excise Act, 1915 (Bihar and Orissa Act H of 1915).
Subject to any rules made under section 90 clause (12), the duty may be levied under section 28 (a) in two ways.
The first method as indicated in section 28 (a) (i) is by payment upon or before importation either in the State of Bihar or in the State or territory from which the article is brought.
This method is followed when the liquor is not imported under bond.
The second method as indicated in section 28 (a)(ii) is by payment upon issue for sale from a warehouse established, authorized or continued under the Act.
In view of the first pro 459 viso to section 28 the payment is made at the rate of duty in force on the date of issue of the article from the warehouse.
This method is followed when the liquor is imported under bond.
The form the bond at page 215 of the Bihar and Orissa Excise Manual, Vol.
II, Part I, issued in 1957 shows that foreign liquor imported under bond is kept without payment of duty in a warehouse established with the approval of the Excise Commssioner under section 15.
In view of section 17 no article can be removed from the warehouse unless duty has been paid or a bond has been executed for the payment thereof.
In the present case, the foreign liquor was imported before November 1, 1967 on payment of duty at the current rate in the manner indicated ins.
28(a)(i).
Duty on imported foreign liquor was enhanced with effect from November 1, 1967.
Sections 27 and 28 do not authorize the levy of the enhanced duty on the liquor imported before November 1, 1967 but lying with the importer on that date.
Section 28, however, is subject to any rules that may be made by the Board of Revenue, Bihar, under section 90 clause (12).
The State of Bihar seeks to justify the levy of the enhanced duty on the stock of imported foreign liquor lying with the petitioner on November 1, 1967 under the proviso to Rule 147 ,framed by the Board of Revenue.
That Rule is as follows : "147.
The duty imposed on (i) foreign liquor and country spirit (a) imported under bond, or (b) manufactured in a distillery, and stored in a distillery or excise warehouse; (ii) Ganja and Bhang (a) imported under bond, or (b) stored in 'an excise warehouse, shall be paid before removal from the distillery or excise warehouse unless a bond has been executed for such payment.
Provided that in case of any revision in the rate of duty on an excisable article, the difference of duty shall be realised from or credited to the licensee, to whom such article has been issued on payment of duty prior to such revision, according as the revised rate of duty is higher or lower than the old rate and the 'calculation of the difference of duty shall be made on the quantity of such article that may remain in possession of such licensee when the revised rate of duty comes into force.
" 460 The main part of Rule 147 applies to foreign liquor imported under bond which, as already stated, is kept in an excise warehouse established under.
the Act.
It provides that ' duty imposed on foreign liquor imported under bond shall be paid before removal from the excise warehouse unless a bond has been executed for such payment.
Under the proviso to Rule 147 in case of any revision of the rate, of duty on an excisable article, the license to whom the article has been issued on payment of duty prior to such revision is liable to pay the difference of duty on the quantity of such article that may remain in his possession when the revised rate of duty comes into force.
The proviso must be construed with reference to the main part of the Rule.
A close scrutiny of the Rule reveals that the main part and the proviso deal with the same subject matter.
The expression "an excisable article" in the proviso means foreign liquor imported under bond and other articles on which duty is payable before removal from the excise warehouse or distillery where they are kept.
It is for this reason that under the proviso the difference of duty is realised from or credited to the licensee to whom the article has been issued from the excise warehouse or distillery on payment of duty prior to such revision.
The proviso does not :apply to all imported foreign liquor.
It applies only to foreign liquor imported under bond, that is to say, foreign liquor on which duty has been levied under section 28(a)(ii) by payment upon issue for sale from an excise warehouse.
It does not apply w foreign liquor not imported under bond upon which duty has been levied under section 28 (a) (i).
The petitioner 's foreign liquor was not imported under bond.
The petitioner is not, therefore, liable to pay under the proviso to Rule 147 the difference of duty in respect of its stock of foreign liquor on November 1, 1947.
The demand for payment of the difference of duty in respect of this stock is not authorised by the Act or the proviso to Rule 147.
The petitioner also challenged the constitutionality of section 27 and the rites of the proviso to Rule 147.
In view of our conclusions aforesaid, it is not necessary to decide these questions.
In the result, there will be an order in terms of (a) (iii) and (b) of the petition.
The order of the Superintendent of Excise, Bihar, dated January 3, 1968, copy whereof is Annexure B,to the petition is quashed and set aside and the respondents are prohibited from enforcing the aforesaid order.
The respondents shall pay to the petitioner the costs of the petition.
G.C. Petition allowed. | The petitioner was a company manufacturing Indian made foreign liquor in Himachal Pradesh and Uttar Pradesh.
It had depots for sale of its products at Patna and Ranchi in the State of Bihar.
Before October 13, 1967 it .imported foreign liquor into the State of Bihar from Himachal Pradesh and Uttar Pradesh for purposes of sale at its Patna and Ranchi depots on payment of duty at the then current rate.
Duty on liquor from Himachal Pradesh was paid upon or before importation by making deposits in the State Bank of India at Patna and Ranchi.
Duty on liquor from Uttar Pradesh was paid on importation by making deposits with the government of that State.
By notification dated October 13, 1967 duty on foreign liquor was enhanced with.
effect from November 1, 1967.
The Superintendent of Excise, Patna directed the company to pay the, difference in duty on the opening balance of Indian made foreign liquor in its stock on November 1, 1967.
The company challenged the demand in a writ petition under article 32 of the Constitution.
Apart from sections 27 and 28 of the Act the respondent State relied on the proviso to r. 147 of the Rules made under section 90 of the Act.
HELD i (i) The foreign liquor was imported before November 1, 1967 on payment of duty at the current rate in the manner indicated in section 28(a)(i).
Duty on imported foreign liquor was enhanced with effect from November 1, 1967.
Sections 27 and 28 did not authorize the levy of the enhanced duty on the liquor imported before November 1, 1967 but lying with the importer on that date.
(ii) A close scrutiny of r. 147 reveals that the main part and the proviso deal with the same subject matter.
The expression "an excisable article" in the proviso means foreign liquor imported under .bond and other articles on which duty is payable.
before removal from the excise warehouse or distillery where they are kept.
It is for this reason that under the proviso the difference of duty is realised from or credited to the licensee to whom the article has been issued from the excise warehouse or distillery on payment of duty prior to such revision.
The proviso does not apply to all imported foreign liquor.
It applies only to foreign liquor imported under bond, that is to say, foreign liquor on which duty has been levied under section 28(a)(ii) by payment upon issue, for sale from an excise warehouse.
It does not apply to foreign liquor not imported under bond upon which duty has been levied under section 28(a)(i).
The petitioner 's foreign liquor was not imported under bond.
The petitioner was therefore not liable to pay under the proviso 3 Sup.
C.I./69 12 458 to r. 147 the difference of duty in respect of its stock of foreign liquor on November 1, 1967.
The demand for payment of the difference of duty in respect of this stock was not authorized by the Act or the proviso to r. 147.
[460 C F] |
Appeal No. 13 of 1966.
Appeal from the judgment and order dated January 13, 1964 of the Punjab High Court, Circuit Bench at Delhi in Civil Writ No. 557 D of 1961.
M.P. Vashi, Dalip K. Kapur,, S.V. Tambwekar and A. G. Ramaparkhi, ,for the appellant.
D. Narsaraju, R.M. Mehta and S.P. Nayar, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by certificate though.
several contentions were raised in the memo of appeal only two of them were pressed at the time of hearing.
They are: (1) under the circumstances of the case the confiscation ordered by the Collector, Central Excise is illegal and (2) under any circumstance he could not have confiscated the entire quantity of tobacco used in the mixture.
The appellants are tobacco merchants in Dashrath village near Baroda in Gujarat State.
At the relevant time they were holding Central Excise licence in form L 2 and L 5 for the purpose of storing, selling and processing duty paid and non duty paid tobacco.
They had their own duty paid and non duty paid godowns.
In about December 1958 according to their books they possessed the following lots of different varieties of tobacco.
variety of tobacco Quantity Rate of duty Veriety of tobacco Quantity Rate of duty Bmds.
Rs. Biri Patti " 251.8 1.20 np per Ib Stems Kandi " 287.20 0.50 Do.
Rava " 1326.14 0.50 Do.
Stalk Kandi " 57.20 0.06 Do.
582 On December 13, 1958 the appellants obtained permission from the Local Central Excise authorities to mix the above lots of tobacco.
The percentage of different varieties of tobacco when mixed would have been as under: Rava 68.97 % Stems Kandi 14.86 % Biri Patti 13.07 % Stalk Kandi 3.00% On December 23, 1958 when the process of mixing was still going on the Superintendent of Central Excise, Preventive Headquarters, Baroda and his party raided the duty paid premises of the appellants.
There he seized the entire mixture tobacco weighing Mds.
2004.3 srs.
i.e. 1,64,834.50 lbs.
of tobacco.
According to that Superintendent when experiments were conducted he found in the above mixture percentage of different varieties as under: Rava 44 % Biri Patti 51.50 % Stems Kandi 3 .74 % From this he concluded that 'considerable quantity of non duty paid Biri Patti tobacco had been utilised in the manufacture of the mixture.
Hence notice was issued to the appellants on January 6, 1959 to show cause why action should not be taken against them under rule 40 of the Central Excise Rules 1944 inasmuch as they brought into duty paid premises 60,770 lbs.
of Biri Patti tobacco without payment of duty.
It was also alleged in that notice that the appellants had removed certain quantity of Rava tobacco from L 2 premises.
The appellants submitted their reply on March 13, 1959.
At the hearing before the Collector as the appellants challenged the correctness of the experiments conducted by the Superintendent, Central Excise, the Collector himself in the presence of the appellants conducted a fresh experiment.
On the basis of that experiment he came to the conclusion that the results obtained by the experiment conducted by the Superintendent, Central Excise are by and large correct.
By his order dated April 13, 1959, the Collector, Central Excise held the appellants guilty of contravening rule 40 and consequently levied on them a penalty of Rs. 2,000 as well as the duty payable under law.
He also ordered the confiscation of the seized tobacco weighing 1,64,834.50 lbs.
But he gave an option to the appellants of redeeming the same on payment.
of a fine of Rs. 1 lac.
The appellants paid the amount of fine.
under protest and got the goods released.
Thereafter they moved the High Court of Bombay under article 226 of the Constitution for quashing the order of the Collector but that application was withdrawn as the appellants first 583 wanted to exhaust their remedy under the Central Excise Act.
The appellants unsuccessfully went up in appeal and thereafter in revision under the Central Excise and Salt Act, 1944 against the order of the Collector.
After the 3rd respondent dismissed their revision petition they filed in the High Court of Punjab at Delhi Civil Writ No. 557 D of 1961 challenging the legality of the order made by the Collector of Central Excise on April 13, 1959.
That petition was dismissed by a Division Bench of that Court on January 13, 1964.
This appeal is brought against that decision.
in this Court the finding of the Collector of Central Excise that the appellants were guilty of mixing the duty paid tobacco with non duty paid tobacco and thereby they contravened rule 40 was not challenged.
Nor was there any dispute about the quantity of non duty paid tobacco used in the mixture.
The main contention of Mr. M.P. Vaish, learned Counsel for the appellants was that under rule 40, the Collector could not have confiscated the tobacco mixture as it consisted of both duty paid tobacco as well as tobacco on which duty had not been paid.
His alternative contention was that under any circumstance the Collector could not have confiscated anything more than 60,770 ' lbs.
of the mixture which can be said to represent Biri Patti tobacco on which duty had not been paid.
In support of his first contention he heavily relied on the decision of K.T. Desai, J. in Messrs. Valitmahomed Gulamhusain Sonavala & Co. vs C.T. A. Pillai (1).
The seized tobacco mixture weighed 1,64,834.50 lbs.
That included 60,770 lbs.
of Biri Patti tobacco on which duty had not been paid.
But on the remaining quantity duty had been paid.
The tobacco seized was found in the godown licenced to store duty paid tobacco.
Hence the appellants were clearly guilty of contravening rule 40 of the Central Excise Rules which reads: "Except as provided in the proviso to sub rule (1) of rule 32 and in rule 171 no wholesale purchaser of unmanufactured tobacco for the purpose of trade or manufacture and no wholesale purchaser of other unmanufactured products from a curer shall receive into any part of his premises or into his custody or possession, any unmanufactured tobacco or other unmanufactured products, other than tobacco or other unmanufactured products imported from a foreign country otherwise than under a valid permit granted by an officer showing that the proper duty has been paid; and every such wholesale purchaser who receives or has in his custody or possession any such goods, in contravention of this rule shall, in respect of every such offence, be liable to pay the duty leviable on such (1) (1960) 42 B.L.R., p. 634.
584 goods, and to a penalty which may extend to two thousand rupees, and the goods shall also be liable to confiscation." .lm0
In view of this rule the legality of the order made by the Collector in so far as he levied duty as well as penalty cannot be challenged and was not challenged before us.
But so far as the confiscation is concerned ' it was urged that under the rule in question only tobacco on which duty had not been paid could alone have been confiscated.
In the instant case even according ,to the finding of the Collector only on 66,770 lbs.
of Biri Patti tobacco the duty had not been paid; but on the remaining tobacco seized duty had been paid, it was not possible to separate the duty paid tobacco from the non duty paid tobacco; hence it was impermissible for the Collector to confiscate the said tobacco under Rule 40 as that rule permitted the confiscation of only non duty paid tobacco.
In Sonavala 's case(1) referred to earlier Desai, J. had held that the right to confiscate smuggled goods under section 167(8) of the does not carry with it the right to confiscate unsmuggled goods.
The words "such goods ' appearing in section 167(8) of the Act cannot be interpreted .to mean similar goods.
It is not open to the Customs authorities to confiscate similar goods even though they may be of the same quality, bulk and value.
The words 'such goods ' mean the very goods which have been smuggled.
If the smuggled goods lose their identity, it would not be open to the Customs officers to confiscate any part of those goodS.
Where, therefore, gold that has been smuggled has in the melting process got so mixed up with gold that is unsmuggled that it is impossible to separate the smuggled gold from the unsmuggled one, the right to confiscate smuggled gold ceases when the two get inextricably mixed up.
The broad proposition laid down by Desai, J. undoubtedly supports the contention advanced on behalf of the appellants.
We shall presently show that this statement of the law is not correct but it is necessary to mention at this juncture that in the Sonavala 's case(1) an innocent third party had purchased the smuggled gold for proper value and mixed the same with unsmuggled gold, which circumstance had an important bearing on the decision of the case.
In Institutes of Justinian at page 104 dealing with the topic commixtio it is observed: "If the things mixed, still remaining the property of their former owners, were easy to separate again, as for instance, cattle united in one herd, when one owner brought his claim by vindicatio 'his property was restored to him without difficulty but if there was difficulty in separating the materials from each other, as in dividing the grains of wheat in a heap, the obvious (1960) 42 B.L.R.p.
585 mode would be to distribute the whole heap in shares proportionate to the quantity of wheat belonging to the respective owners.
But it might happen that the wheat mixed together was not all of the same quality, and therefore the owner of the better kind of wheat would lose by having a share determined in amount only by the quantity of his wheat; and the judge therefore was permitted to exercise his judgment how great an addition ought to be made to his share to compensate for the superior quality of the wheat originally belonging to him.
" In Williams on Personal Property (18th Edn.) at p. 50, it is observed: "The acquisition of ownership by accession or confusion of substances also presupposes a previous title.
Thus the young of a domestic animal belong to the owner of the mother.
If any substances, for instance tallow, belonging to.
various owners be mixed by consent or accidentally, the mass appears to belong to the owners of its parts in common.
And if the confusion be made wilfully by one without the other 's leave, the mass belongs to the latter, whose ownership is thus unlawfully invaded." Dealing with the same topic it is observed in Halsbury 's Laws of England 3rd Edn.
(Vol. 29) at p. 378.
"Ownership of goods may be acquired by confusion or intermixture, if the goods, when mixed, are indistinguishable.
If the goods are mixed by agreement or consent the proprietors have an interest in common in proportion to their respective shares; if mixed by accident or the act of a third party, or which neither owner is responsible, the proprietors become owners in common of the mixed property in proportion to the amounts contributed.
Where, however, one man wilfully mixes his goods with those of another without the approbation or knowledge of the other, the whole be longs to the latter.
" The law on this topic was stated by Bovill, C.J. as early as 1868 ' in Spence and Anr.
vs The Union Marine Insurance Co. Ltd.(1) thus: "In our own law there are not many authorities to be found upon this subject but, as far as they go, they are in favour of the view, that, when goods of diffe (1) Law Reports (Common Pleas) 3, 1867 68.
586 rent owners become by accident so mixed together as to be undistinguishable, the owners of the goods so mixed become tenants in common of the whole, in the proportions which they have severally contributed to it.
The passage cited from the judgment of Blackburn, J., in the case of the tallow which was melted and flowed into the sewers, is to that effect: Buckley vs Gross.
And a similar view was adopted by Lord Abinger in the case of the mixture of oil by leakage on board ship in Jones vs Moore. ' "It has been long settled in our law, that where goods are mixed so as to become undistinguishable, by the wrongful act or default of one owner, he cannot recover, and will not be entitled to his proportion, or any part of the property, from the other owner, but no authority has been cited to shew that any such principle has ever been applied, nor indeed could it be applied, to the case of an accidental mixing of the goods of the two owners; and there is no authority nor sound reason for saying that the goods of several persons be the property of their several owners, and become bona vacantia.
" The same principle was again reiterated by the House of Lords in Smurthwaite and Ors.
vs Hannay and Ors.(1) The rules enunciated above are of assistance in finding out a solution to the problem before us though they do not govern the same.
In the instant case there is no doubt that the appellants were guilty of an unlawful act in mixing duty paid tobacco with the non duty paid tobacco but the fact remains that they were the owners of both those lots at the time they mixed them and hence the legal principles set out earlier do not cover such a case.
It must also be remembered that in dealing with a provision relating to forfeiture we are dealing with a penal provision.
It would not be proper for us to extent the scope of that provision by reading into it words which are not there and thereby widen the scope of the provision relating to confiscation.
Rule 40 permits the Central Excise authorities to confiscate only those goods on which duty has not been paid.
It does not permit them either specifically or by necessary implication to confiscate other goods.
Therefore it was not permissible for the Collector to confiscate the entire tobacco mixture.
At the same time no person can be permitted to benefit by his wrongful act.
No rule of law should be so interpreted as to permit or encourage its circumvention.
If by the wrongful act of a party he renders it impossible for the authorities to confiscate under rule 40 the non (1) [1894] A.C.p.
587 duty paid goods it is in our opinion open to those authorities to confiscate from out of the goods seized, goods of the value reasonably representing the value of the non duty paid goods mixed in the goods seized.
Applying that rule to the facts of this it follows that the Collector, Central Excise could have confiscated out of the tobacco seized,.
much of it as can be held to reasonably represent the value of the tobacco on which the duty had not been paid.
As noticed earlier the tobacco confiscated had been returned to the appellants after realising from them a sum of Rs 1 lac as fine.
The Counsel for the parties agreed at the hearing that the ' value of the Biri Patti tobacco used in the mixture for which no duty had been paid could be fixed at Rs. 35,000.
In view of this agreement it is not necessary for us to remit the case back to the Collector of Central Excise for assessing the value of the tobacco on which duty had not been paid.
In view of our earlier findings the fine to be levied on the appellants in lieu of the confiscation that could have been ordered has to be fixed at Rs. 35,000.
From this it follows that the Collector has to refund to the appellants a sum of Rs. 65,000 which he has collected from them in excess of the aforementioned Rs. 35,000.
The appeal is allowed to that extent.
In the circumstances of the case we direct the parties to bear their own costs both in this Court as well as before the High Court.
R.K.P.S. Appeal allowed in part. | The appellants were tobacco merchants in Baroda in Gujarat State and were holding Central Excise licence in Forms L 2 and L 5 for the purpose of storing, selling and processing duty paid and non duty paid tobacco.
On December 23, 1958 while the process of mixing some tobacco was going on in a godown where duty paid tobacco was.
kept, the Superintendent of Central Excise., Preventive Headquarters, Baroda and his party raided the premises of the appellants and seized a mixture of tobacco weighing 1,64,834.50 lbs.
tobacco This mixture included 60,770 lbs.
of tobacco on which duty had not been paid.
After the 'appellants were issued a show cause notice why action should not be taken against them under rule 40 of the Central Excise Rules, 1944, and after they had filed their reply, the Collector, Central Excise, by his order dated April 13, 1959 held the appellants guilty of contravening rule 40 levied on them a penalty of Rs. 2,000 as well as the duty payable under the law, and also ordered the confiscation of the entire quantity of the tobacco seized.
As he gave the appellants the option of redeeming the same on payment of a fine of Rs. 1 lakh, they paid the fine under protest and secured release of the tobacco.
The appellant 's appeal as well as revision against the Collector 's order under the provisions of the Central Excise and Salt Act, 1944, were both dismissed.
The appellants then filed a writ petition under article 226 of the Constitution challenging the legality of the Collector 's order but this was dismissed by the High Court.
In appeal to this Court the only challenge was to the Collector 's order of confiscation.
It was contended, relying on the decision in Messrs. Valimahomed Gulamhusain Sonavala & Co. vs
C.T.A. Pillai, (1960) 42, B.L.R., p. 634, that the Collector could not have confiscated the tobacco mixture as it consisted of both duty paid tobacco as well as tobacco on which duty had not been paid, the alternative contention was that the Collector could not in any extent have.
confiscated more than 60,770 lbs.
of mixture which could be said to represent tobacco on which duty had not been paid.
HELD: Rule 40 permits the Central Excise.
authorities to confiscate only those goods on which duty had not been paid.
It does not permit them either specifically or by necessary implication to confiscate other goods.
Therefore it was not permissible for the Collector to confiscate the entire tobacco mixture.
At the same time no person can be permitted to benefit by his wrongful act.
No rule of law should be so interpreted as to permit or encourage its circumvention.
If by the wrongful act of a party he renders it impossible for the authorities to confiscate under 581 rule 40 the non duty paid goods, it is open to those authorities to confiscate from out of the goods seized, goods of the 'value reasonably representing the value of the non duty paid goods mixed in the goods seized.
Applying that rule to the facts of the present case it follows that although the appellants were guilty under Rule 40 of an unlawful act in mixing duty paid tobacco with non duty paid tobacco, the Collector could have confiscated out of the tobacco seized so much of it as can be held to reasonably represent the value of the tobacco on which the duty had not been paid.
[586 G 581 B] As the parties were agreed that the value of the tobacco used in the mixture for which no duty had been paid could be fixed at Rs. 35,000,.
the fine to be levied on the appellant in lieu of the confiscation that could have been ordered had to.
be fixed at Rs. 35,000.
The Collector therefore had to refund to the appellant a sum of Rs. 65,000.
Institutes of Justinian, p. 104; Williams on Personal Property (18th edition) p. 50; Spence and Ant.
vs The Union Marine Insurance Co. Ltd., Law Reports (Common Pleas) 3, 1867 68 and Smurthwaite and Ors.
vs Hannay and Ors.
, [1894] A.C.p. 494; referred to. |
ivil Appeal No. 316 ot 1987.
From the Judgment and Order dated 31.12.1986 of the Disciplinary Committee of the Bar Council of India in B.C.I. Transfer Case No. 407 of 1985.
S.S. Javali and Raju Ramachandra for the Appellant.
Ravinder Bhat, N. Ganapathy and Promod Swarup for the Respondents .
The Judgment of the Court was delivered by THAKKAR, J.
A hast of questions of seminal significance, not only for the Advocate who has been suspended from practising his profession for 3 years on the charge of having withdrawn a suit (as settled) without the instructions from his client, but also for the members of the legal profession in general have arisen in this appeal: 1.
Appeal under section 38 of the .
(1) Whether a charge apprising him specifically of the precise nature and character of the professional misconduct ascribed to him needs to be framed? (2) Whether in the absence of an allegation or finding of dishonesty or mens rea a finding of guilt and a punishment PG NO 365 of this nature can be inflicted on him? (3) Whether the allegations and the finding of guilt require to be proved beyond reasonable doubt? (4) Whether the doctrine of benefit of doubt applies? (5) Whether an Advocate acting bona fide and in good faith on the basis of oral instructions given by some one purporting to act on behalf of his client, would be guilty of professional misconduct or of an unwise or imprudent act, or negligence simpliciter, or culpable negligence punishable as professional misconduct? The suit was a suit for recovery of Rs.30,098 (Suit No. 65/81 on the file of Additional City Civil Judge, Bangalore).
It appears that the complainant had entrusted the brief to the appellant which he in his turn had entrusted to his junior colleague (respondent No. 2 herein) who was attached to his Office and was practising along with him at his office at the material time.
At the point of time when the suit was withdrawn, respondent No. 2 was practising on his own having set up his separate office.
On the docket of the brief pertaining to the suit, the appellant made an endorsement giving instructions to withdraw the suit as settled.
A sketch was drawn on the back of the cover to enable the person carrying the brief to the junior colleague to locate his office in order to convey the instructions as per the endorsement made by the appellant.
The allegations made by the complainant against the appellant are embodied in paragraphs 1 & 2 of his complaint: 1.
The petitioner submits that he entrusted a matter to the Second Respondent to file a case against Shri section Anantaraju for recovery of a sum of Rs.30,098 with Court costs and current interest in Case No. O.S. 1965/81 on the file of the City Civil Judge at Bangalore.
The Petitioner submits that the said suit was filed by the first respondent who was then a Junior of the Second respondent.
The petitioner submits that the matter in dispute in the suit was not settled at all and the first respon dent without the knowledge and without the instructions of the petitioner has filed a memo stating that the matter is settled out of Court and got the suit dismissed and he has also received half of the institution court fee within l0 days since the PG NO 366 date of the disposal of the suit.
The petitioner submits that he has not received either the suit amount or the refund of court fee and he is not aware of the dismissal of the suit as settled out of court.
The petitioner submits that when the case was posted for filing of written statement itself the first respondent has filed such a memo stating that the suit was settled out of Court.
The petitioner submits that in fact, the respondents did not even inform the petitioner about the dates of hearing and when the petitioner asked the dates of hearing the respondents informed the petitioner stating that his presence is not required in the Court since the case was posted for filing of written statement and therefore .
the petitioner did not attend the Court on that day.
The petitioner submits that when he enquired about the further date of hearing the respondents did not give the date and said that they would verify the next date of hearing since they have not attended the case since the case was posted for filing written statement by the defendant.
The petitioner submits that when he himself went to the Court and verified he found to his great surprise that the suit is dismissed as settled out of court and latter learnt that even the half of the institution court fee is also taken by the first respondent within 10 days.
The version of the appellant may now be unfolded: (i) One Gautam Chand (R.W.3) has been a longstanding Client of the appellant.
Gautam Chand had business dealing with the plaintiff Haradara and the Defendant Anantaraju.
Besides.
Anantaraju executed an agreement dated 9.8.1980 to sell his house property to Gautam Chand.
He received earnest money in the sum of rupees 35,000 from Gautam Chand.
Anantaraju, however, did not execute the sale deed within the stipulated period and during the extended period It was in these circumstances that Gautam Chand (RW 3) approached the appellant for legal advice.
(2) It is the common case of parties that Gautam Chand introduced the complainant Haradara to the appellant and his colleague Advocate respondent No. 2 (3) The appellant caused the issue of notice dated 1.6.1981 (exhibit R/15) on behalf of Gautam Chand addressed to PG NO 367 the seller Anantaraju calling upon him to execute the sale dead.
On the same date, a notice was separately issued on behalf ot the complainant Haradara addressed to Anantaraju demanding certain amounts due on the three `self ' bearer cheques aggregating, Rs.30,098 issued by Anantaraju in course of their mutual transactions.
This notice was issued by the Advocate respondent No.2 acting on behalf of the complainant Haradara.
(4) Gautam Chand (RW 3) and Haradara (PW 1) were friends.
Anantaraju was their common adversary.
There was no conflict of interests as between Gautam Chand and Haradara.
Gautam Chand instructed the appellants and his colleague respondent No. 2.
Ashok, that he was in possession of the said cheques issued by Anantaraju and that no amount was actually due from Anantaraju to the complainant Haradara.
Gautam Chand was desirous of stops to induce Anantaraju to execute the sale deed in his favour.
(5) A suit being O.S. No. 1965 of 1981 was instituted on behalf of the complainant Haradara claiming on amount of Rs. 30,000 and odd, from the defendant Anantaraju on the basis of the aforesaid cheques.
It was instituted on 30.6.1981.
An interlocutary application was moved on behalf of Haradara by respondent No. 2 as his Advocate seeking the attachment before judgment of the immovable property belonging to the defendant Anantaraju.
The property was in fact the subject of an agreement to sell between Anantaraju and Gautam Chand (RW 3) The Court initially declined to grant an order of attachment.
In order to persuade the Court, certain steps were taken through the said Gautam Chand.
He caused the Publication of a notice stating that the property in question was the subject matter of an agreement between Anantaraju and himself and it should not be dealt with by anyone.
The publication of this notice was relied upon subsequently on behalf of the complainant Haradara by his advocate (respondent No. 2).
Ashok in seeking an order of attachment.
The Court accepted his submissions and passed the order of attachment.
(6) Subsequently the defendant Anantaraju executed the sale deed dated 27th Nov., 1981 in favour of Gautam Chand.
The object of the suit was achieved.
The sale deed was in PG NO 368 fact executed during the subsistence of the order of attachment concerning the same property.
The plaintiff Haradara has not objected to it at any time.
Consistently, the appellant had reasons to believe the information of settlement of dispute conveyed by the three parties together on 9.12.1981.
(7) Gautam Chand (RW 3) and the complainant Haradara acted in interest and scoured the attachment of property which was the subject matter of an agreement to sell in favour of Gautam Chand.
The suit instituted in the name of the complainant Haradara was only for the benefit of Gautam Chand by reference to his interest in the property.
(8) The appellant conveyed information of the settlement of dispute by his note made on the docket.
He drew a diagram of the location of residence of the respondent No. 2 Ashok Advocate.
(exhibit R 1A at page 14 Additional Documents).
The papers were delivered to respondent No. 2 Ashok Advocate by Gautam Chand (PW 3).
(9) After satisfying himself, respondent No. 2 Ashok advocate appeared in Court on 10.12.81 and filed a Memo prepared in his handwriting recording the fact of settlement of dispute and seeking withdrawal of the suit.
The Court passed order dated 10.12.1981 dismissing the suit, O.S. No. 1965 of 1981.
(10) Even though the plaintiff Haradara gained knowledge of the disposal of suit, he did not meet the appellant nor did he address him for over 1 1/2 years until May, 1983.
He did not also immediately apply for the restoration of suit.
An application for restoration was filed on the last date of limitation on 11.1.1982.
The application Misc.
16 of 1982 was later allowed to be dismissed for default on 30.7.1982.
It was later sought to be revived by application Misc.
No. 581 of 1982.
Necessary orders were obtained on 16.7.1988.
Thus Misc.
16 of 1982 (Application for restoration of suit) is pending in Civil Court.
On a survey of the legal landscape in the area of disciplinary proceedings this scenario emerges: (1) In exercise of powers under section 35 contained in Chapte V entitled "conduct of Advocates", on receipt of PG NO 369 a complaint against an Advocate (or suo motu) if the State Bar Council has `reason to believe ' that any Advocate on its role has been guilty of "professional or other misconduct".
Disciplinary proceeding may be initiated against him.
(2) Neither section 35 nor any other provision of the Act defines the expression ' legal misconduct ' or the expression `misconduct ' .
(3) The Disciplinary Committee of the State Bar Council is authorised to inflict punishment, including removal of his name from the rolls of the Bar Council and suspending him from practise for a period deemed fit by it, after giving the Advocate concerned and the 'Advocate General ' of the State an opportunity of hearing.
(4) While under section 42(1) of the Act the Disciplinary Committee has been conferred powers vested in a Civil Court in respect of certain matters including summoning and enforcing Attendance of any person and examining him on oath, the Act which enjoins the Disciplinary Committee to "afford an opportunity of hearing ' (Vide Sec.
S) to the Advocate does not prescribe the procedure to be followed at the hearing.
(5) The procedure to be followed in an Enquiry under Section 35 is outlined in of the Bar Council of India Rules (1) made under the authority of section 60 of the Act.
(6) Rule 8(1) of the said Rules enjoins the Disciplinary Committee to hear the concerned parties that is to say the complainant and the concerned Advocate as also the Attorney General or the Solicitor General or the Advocate General.
It also enjoins that if it is considered appropriate to take oral evidence the procedure of the trial of civil suits shall as far as possible be followed (2).
At this juncture it is appropriate to articulate some basic principles which must inform the disciplinary proceedings against members of the legal profession in proceedings under Section 35 of the , read with the relevant Rules: 1. Published in Gazette of India on September 6, 1975 in Section (pages 1671 to 1697).
PG NO 370 (i) essentially the proceedings are quasi criminal in character inasmuch as a Member of the profession can be visited with penal consequences which affect his right to practice the profession as also his honour; under Section 35(3)(d) of the Act, the name of the Advocate found guilty of professional or other misconduct can be removed from the State Roll of Advocates.
This extreme penalty is equivalent of death penalty which is in vogue in criminal jurisprudence The Advocate on whom the penalty of his name being removed from the roll of Advocate is imposed would be deprived of practising the profession of his choice, would be robbed of his means of livelihood, would be stripped of the name and honour earned by him in the post and is liable to become a social apartheid.
A disciplinary proceeding by a statutory body of the Members of the profession which is statutorily empowered to impose a punishment including a punishment of such immense proportions in quasi criminal in character; (ii) as a logical corollary it follows that the Disciplinary Committee empowered to conduct the enquiry and to inflict the punishment on behalf of the body, in forming an opinion must be guided by the doctrine of benefit of doubt and is under an obligation to record a finding of guilt only upon being satisfied beyond reasonable doubt.
It would be impermissible to reach a conclusion on the basis preponderence of evidence or on the basis of surmise, conjucture or suspicion.
It will also be essential to con sider the dimension regarding mens rea.
This proposition is hardly open to doubt or debate particularly having regard to the view taken by this Court in L.D. Jaisinghani vs Naraindas N. Punjubi, wherein Ray, CJ., speaking for the Court has observed: `In any case.
we are left in doubt whether the complainant 's version.
with which he had come forward with considerable delay was really truthful.
We think that, in a case of this nature, involving possible disbarring of the advocate concerned, the evidence should be of a character which 2.
Rule 8(1) "The Disciplinary Committee shall hear the Attorney General or the Solicitor General of India or the Advocate General, as the case may be or their Advocate, and parties or their Advocate, if they desire to be heard, and determine the matter on documents and affidavits unless it is of the opinion that it should be in the interest of justice to permit cross examination of the deponents or to take oral evidence, in which case the procedure for the trial of civil suits, shall as far as possible be followed.
" PG NO 371 should leave no reasonable doubt about guilt.
The Disciplinary Committee had not only found the appellant guilty but had disbarred him permanently." (Emphasis added).
(iii) in the event of a charge of negligence being levelled against an Advocate, the question will have to be decided whether negligence simpliciter would constitute misconduct.
It would also have to be considered whether the standard expected from an Advocate would have to answer the test of a reasonably equipped prudent practitioner carrying reasonable workload A line will have to be drawn between tolerable negligence and culpable negligence in the sense of negligence Which can be treated as professional misconduct exposing a Member of the profession to punishment in the course of disciplinary proceedings.
In forming the opinion on this question the standards of professional conduct and etiquette spelt out in Chapter 2 of of the Rules governing Advocates, framed under Section 60 (3) and Section 49(1)(g) of the Act, which form a part of the Bar Council of India Rules may be consulted.
As indicated in the preamble of the Rules, an Advocate shall, at all times compose himself in a manner befitting his status as an Officer of the Court, a privileged member of the community and a gentleman bearing in mind what may be lawful and moral for one who is not a member of the bar may still be improper for an Advocate and that his conduct is required to conform to the rules relating to the duty to the Court, the duty to the client, to the opponent, and the duty to the colleagues, not only in letter but also in spirit.
It is in the light of these principles the Committee would be required to approach the question as regards th guilt or otherwise of an Advocate in the context of professional misconduct levelled against him.
In doing so apart from conforming to such procedure as may have been outlined in the Act or the Rules, the Disciplinary Authority would be expected to exercise the power with full consciousness and awareness of the paramount consideration regarding principles of natural justice and fair play.
The State Bar Council, after calling for the comments of the appellant in the context of the complaint, straightway proceeded to record the evidence of the parties.
No charge was framed specifying the nature and content of the professional misconduct attributed to the appellant.
Nor PG NO 372 were any issues framed or points for determination formulated.
The Disciplinary Committee straightway proceeded to record evidence.
As the case could not be concluded within the prescribed time limit the matter came to be transferred to the Bar Council of India which has heard arguments and rendered the order under appeal.
The questions which have surfaced are: (1) Whether a specific charge should have been framed apprising the appellant of the true nature and content of the professional misconduct ascribed to him? (2) Whether the doctrine of benefit of doubt and the need for establishing the basic allegations were present in the mind of the Disciplinary Authority in recording the finding of guilt or in determining the nature and extent of the punishment inflicted on him? (3) Whether in the absence of the charge and finding of dishonesty against him the appellant could be held guilty of professional misconduct even on the assumption that he had acted on the instructions of a person not authorised to act on behalf of his client if he was acting in good faith and in a bona fide manner.
Would it amount to lack of prudence or nonculpable negligence or would it constitute professional misconduct? Now so far as the procedure followed by the State Bar Council at the Enquiry against the appellant, is concerned it appears that in order to enable the concerned Advocate to defend himself properly, an appropriate specific charge was required to be framed.
No doubt the Act does not outline the procedure and the Rules do not prescribe the framing of a charge.
But then even in a departmental proceeding in an enquiry against an employee, a charge is always framed.
Surely an Advocate whose honour and right to earn his livelihood are at stake can expect from his own professional brethern.
what an employee expects from his employer? Even if the rules are silent, the paramount and overshadowing considerations of fairness would demand the framing of a charge.
In a disciplinary proceeding initiated at the level of this Court even though the Supreme Court Rules did not so prescribe, in re: Shri `M ' an Advocate of the Supreme Court of India [1956] SCR page 811(814) this Court framed a charge after making these observations: PG NO 373 We treated the enquiry in Chambers as a preliminary enquiry and heard arguments on both sides with reference to the matter of that enquiry.
We came to conclusion that this was not a case for discharge at that stage.
We accordingly reframed the charges framed by our learned brother, Bhagwati J., and added a fresh charge.
No objection has been taken to this course.
But it is as well to mention that, in our opinion, the terms of Order IV, rule 30 of the Supreme Court Rules do not preclude us from adopting this course, including the reframing of, or adding to, the charges specified in the original summons, where the material at the preliminary enquiry justifies the same.
The fresh enquiry before us in Court has proceeded with reference to the following charges as reframed and added to by us.
" It would be extremely difficult for an Advocate facing a disciplinary proceeding to effectively defend himself in the absence of a charge framed as a result of application of mind to the allegations and to the question as regards what particular elements constituted a specified head of professional misconduct.
The point arising in the context of the non framing of issues has also significance.
As discussed earlier Rule 8(1) enjoins that "the procedure for the trial of Civil suits, shall as far as possible be followed. ' ' Framing of the issues based on the pleadings as in a Civil suit would be of immense utility.
The controversial matters and substantial questions would be identified and the attention focussed on the real and substantial factual and legal matters in contest.
The parties would then become aware of the real nature and content of the matters in issue and would come to know (l) on whom the burden rests (2) what evidence should be adduced to prove or disprove any matter (3) to what end cross examination and evidence in rebuttal should be directed.
When such a procedure is not adopted there exists inherent danger of miscarriage of justice on account of virtual denial of a fair opportunity to meet the case of the other side.
We wish the State Bar Council had initially framed a charge and later on framed issues arising out of the pleadings for the sake of fairness and for the sake of bringing into forefront the real controversy.
In the light of the foregoing discussion the questions arising in the present appeal may now to be examined.
In substance the charge against the appellant was that he had withdrawn a suit as settled without the instructions from the complainant.
It was not the case of the complainant that PG NO 374 the appellant had any dishonest motive or that he had acted in the matter by reason of lack of probity or by reason of having been won over by the other side for monetary considerations or otherwise.
The version of the appellant was that the suit which had been withdrawn had been instituted in a particular set of circumstances and that the complainant had been introduced to the appellant for purposes of the institution of the suit by an old client of his viz. RW 3 Gautam Chand.
The appellant was already handling, a case on behalf of RW 3 Gautam Chand against RW 4 Anantharaju.
The decision to file a suit on behalf of the complainant against RW 4 Anantharaju was taken in the presence of RW 3 Gautam Chand.
It was at the instance and inspiration of RW 3 Gautam Chand that the suit had been instituted by the complainant, but really he was the nominee of Gautam Chand and that the complainant himself had no real claim on his own.
It transpires from the records that it was admitted by the complainant that he was not maintaining any account books in regard to the business and he was not an Income tax assessee.
In addition,the complainant (PW 1) Haradara himself has admitted in his evidence that it was Gautam Chand who had introduce him to the appellant, and that he was in fact taken to the office of the appellant for filling the said suit, by Gautam Chand.
It was this suit which was withdrawn by the appellant.
Of course it was withdrawn without any written instruction from the defendant against whom he had filed the suit for recovery of Rs. 30,000 and odd through Gautam Chand and that he did not know the defendant intimately or closely.
He also admitted that the cheques used to be passed in favour of the party and that he was not entitled to the entire amount.
He used to get only commission.
Since even on the admission of the complainant himself he was taken to the office of the appellant for instituting the suit, by RW 3 Gautam Chand, and old client of th appellant whose dispute with the defendant against whom the complainant had filed the suit existed at the material time and was being handled by the appellant.
The defence of the appellant that he had withdrawn the suit in the circumstances mentioned by him required to be considered in the light of his admissions.
The defence of the appellant being that the suit was withdrawn under the oral instructions of the complainant in the presence of RW 3 Gautam Chand and RW 4 Anantharaju and inasmuch as RWs 3 and 4 supported the version of the appellant on oath, the matter was required to be examined in this background.
Assuming that the evidence of the appellant corroborated by RWs 3 and 4 in regard to the presence of the complainant was not considered acceptable, the question would yet arise as to PG NO 375 whether the withdrawal on the part of the appellant as per the oral instructions of RW 3 Gautam Chand who had taken the complainant to the appellant for instituting the suit, would amount to professional misconduct.
Whether the appellant had acted in a bona fide manner under the honest belief that RW 3 Gautam Chand was giving the instructions on behalf of the complainant required to be considered.
If he had done so in a bona fide and honest belief would it constitute professional misconduct, particularly having regard to the fact that nO allegation regarding corrupt motive was attributed or established? Here it has to be mentioned that the appellant had acted in an open manner in the sense that he had in his own hand made endorsement for withdrawing the suit as settled and sent the brief to his junior colleague.
If the appellant had any oblique motive or dishonest intention.
he would not have made the endorsement in his own hand.
No doubt Rule 19 contained in Section 2 captioned `Duty to the clients ' provides that an Advocate shall not act on the instructions of any person other than his client or his authorised agent.
If, therefore, the appellant had acted under the instructions of RW 3 Gautam Chand bona fide believing that he was the authorised agent to give instructions on behalf of the client, would it constitute professional misconduct? Even if RW 3 was not in fact an authorised agent of the complainant, but if the appellant bona fide believed him to be the authorised agent having regard to the circumstances in which the suit came to be instituted, would it constitute professional misconduct? Or would it amount to only an imprudent and unwise act or even a negligent act on the part of the appellant? These were questions which directly arose to which the Committee never addressed itself.
There is also nothing to show that the Disciplinary Committee has recorded a finding on the facts and the conclusion as regards the guilt in full awareness of the doctrine of benefit of doubt and the need to establish the facts and the guilt beyond reasonable doubt.
As has been mentioned earlier, no charge has been formulated and framed, no issues have been framed.
The attention of the parties was not focussed on what were the real issues.
The appellant was not specifically told as to what constituted professional misconduct and what was the real content of the charge regarding the professional misconduct against him.
In the order under appeal the Disciplinary Committee has addressed itself to three questions viz. PG NO 376 (i) Whether the complainant was the person who entrusted the brief to the appellant and whether the brief was entrusted by the complainant to the appellant? (ii) Whether report of settlement was made without instruction or knowledge of the complainant? (iii) Who was responsible for reporting settlement and instructions of the complainant? In taking the view that the appellant had done so probably with a view to clear the cloud of title of RW 3 as reflected in paragraph 22 quoted herein, the Disciplinary Committee was not only making recourse to conjucture.
surmise and presumption on the basis of suspicion but also attributing to the appellant a motive which was not even attributed by the complainant and of which the appellant was not given any notice to enable him to meet the charge: "It is not possible to find out as to what made PW 2 to have done like that.
As already pointed out the house property which was under attachment had been purchased by RW 3 during the subsistence of the attachment.
Probably with a view to clear the cloud of title of RW 3, PW 2 might have done it.
This is only our suspicion.
Whatever it might be, it is clear that RW 2 had acted illegally in directing RW l to report settlement.
" In our opinion the appellant has not been afforded reasonable and fair opportunity of showing cause inasmuch as the appellant was not apprised of the exact content of the professional misconduct attributed to him and was not made aware of the precise charge he was required to rebut.
The conclusion reached by the Disciplinary Committee in the impugned order further shows that in recording the finding of facts on the three questions, the applicability of the doctrine of benefit of doubt and need for establishing the facts beyond reasonable doubt were not realised.
Nor did the Disciplinary Committee consider the question as to whether the facts established that the appellant was acting with bona fides or with mala fides, whether the appellant was acting with any oblique or dishonest motive, whether there was any mens rea, whether the facts constituted negligence and if so whether it constituted culpable negligence.
Nor has the Disciplinary Committee considered the question as regards the quantum of punishment in the light of the aforesaid considerations and the exact nature of the professional misconduct established against the appellant.
PG NO 377 The impugned order passed by the Disciplinary Committee, therefore cannot be sustained.
Since we do not consider it appropriate to examine the matter on merits on our own without the benefit of the finding recorded by the Disciplinary Committee of the apex judicial body of the legal profession, we consider it appropriate to remit the matter back to the Disciplinary Committee.
As observed by this Court in O.N. Mohindroo vs The District Judge, Delhi and Anr., Supreme Court Bar Association, in paragraph 23 quoted hereinbelow, we have no doubt that the Disciplinary Committee will approach the matter with an open mind: "From this it follows that questions of professional conduct are as open as charges of cowardice against Generals for reconsideration of the conviction of persons convicted of crimes.
Otherwise how could the Hebron brothers get their conviction set aside after Charles Peace confessed to the crime for which they were charged and held guilty? ' ' We must explain why we consider it appropriate to remit the matter back to the Bar Council of India.
This matter is one pertaining to the ethics of the profession which the law has entrusted to the Bar Council of India.
It is their opinion of a case which must receive due weight because in the words of Hidayatullah, CJ, in Mohindroo 's case: "This matter is one of the ethics of the profession which the law has entrusted to the Bar Council of India.
It is their opinion of a case which must receive due weight. ' ' It appears to us that the Bar Council of India must have an opportunity to examine the very vcxed and sensitive question which has arisen in the present matter with utmost care and consideration.
the question being of great importance for the entire profession.
We are not aware of any other matter where the apex body of the profession was required to consider whether the bona fide act of an Advocate who in good faith acted under the instructions of someone closely connected with his client and entertained a bona fide belief that the instructions were being given under the authority of his client, would be guilty of misconduct.
It will be for the Bar Council of India to consider whether it would constitute an imprudent act, an unwise act.
a negligent act or whether it constituted negligence and if so a culpable negligence, or whether it constituted a professional misconduct deserving severe punishment, even when it was not established or atleast not PG NO 378 established beyond reasonable doubt that the concerned Advocate was acting with any oblique or dishonest motive or with mala fides.
This question will have to be determined in the light of the evidence and the surrounding circumstances taking into account the doctrine of benefit of doubt and the need to record a finding only upon being satisfied beyond reasonable doubt.
In the facts and circumstances of the present case, it will also be necessary to re examine the version of the complainant in the light of the foregoing discussion keeping in mind the admission made by the complainant that he was not maintaining any books of accounts and he was not an Income tax assessee and yet he was the real plaintiff in the suit for Rs.30,000 and odd instituted by him, and in the light of the admission that it was RW 3 Gautam Chand who had introduced him to the appellant and that he was in fact taken to the office of the appellant, for filing the suit, by RW 3 Gautam Chand.
The aforesaid question would arise even if the conclusion was reached that the complainant himself was not present and had not given instructions and that the appellant had acted on the instructions of RW 3 Gautam Chand who had brought the complainant to the appellant 's office for instituting the suit and who was a close associate of the complainant.
Since all these aspects have not been examined at the level of the Bar Council, and since the matter raises a question of principle of considerable importance relating to the ethics of the profession which the law has entrusted to the Bar Council of India, it would not be proper for this Court to render an opinion on this matter without the benefit of the opinion of the Bar Council of India which will accord close consideration to this matter in the light of the perspective unfolded in this judgment both on law and on facts.
We are reminded of the high degree of fairness with which the Bar Council of India had acted in Mohindroo 's case.
The Advocate concerned was suspended from practice for four years.
The Bar Council had dismissed the appeal.
Supreme Court had dismissed the Special Leave Petition summarily.
And yet the whole matter was reviewed at the instance of the Bar Council and this Court was persuaded to grant the review.
A passage extracted from Mohindroo 's case deserves to be quoted in this connection: "37.
We find some unusual circumstances facing us.
The entire Bar of India are of the opinion that the case was not as satisfactorily proved as one should be and we are also of the same opinion.
All processes of the Court are intended to secure justice and one such process is the power of review.
No doubt frivolous reviews are to be discouraged and technical rules have been devised to prevent persons from PG NO 379 reopening decided cases.
But as the disciplinary committee themselves observed there should not be too much technicality where professional honour is involved and if there is a manifest wrong done, it is never too late to undo the wrong.
This Court possesses under the Constitution a special power of review and further may pass any order to do full and effective justice.
This Court is moved to take action and the Bar Council of India and the Bar Association of the Supreme Court are unanimous that the appellant deserves to have the order disbarring him from practice set aside.
We have therefore no doubt that upon the matter being remitted to the Bar Council of India it will be dealt with appropriately in the light of the aforesaid perspective.
We accordingly allow this appeal, set aside the order of the Bar Council in so far as the appellant is concerned and remit the matter to the Bar Council of India.
however, wish to make it clear that it will not be open to the complainant to amend the complaint or to add any further allegation.
We also clarify that the evidence already recorded will continue to form part of the record and it will be open to the Bar Council of India to hear the matter afresh on the same evidence.
It is understood that an application for restoration of the suit which has been dismissed for default in the City Civil Court at Bangalore has been made by the complainant and is still pending before the Court.
It will be open to the Bar Council of lndia to consider whether the hearing of the matter has to be deferred till the application for restoration is disposed of.
The Bar Council of India may give appropriate consideration to all these questions.
We further direct that in case the judgment rendered by this Court or any part thereof is reported in Law Journals or published elsewhere, the name of the appellant shall not be mentioned because the matter is still subjudice and fairness demands that the name should not be specified.
The matter can be referred to as an Advocate vs The Bar Council or in re.
an Advocate without naming the appellant.
The appeal is disposed of accordingly.
No order regarding costs.
Y. Lal Appeal disposed of. | The appellant is an Advocate.
Gautam Chand was one of his old clients.
The complainant Respondent No. l engaged the appellant on being introduced by Gautam Chand to file a Suit against Shri section Anantaraju for recovery of a sum of Rs.30,098 with Court costs and interest in the Court of City Civil Judge at Bangalore.
The appellant passed on the papers to his junior advocate to file the Suit which he did.
The complainant 's allegation is that the matter in dispute in the suit had not been settled at all and the appellant without the knowledge and without his instructions filed a memo in the Court to the effect that the matter has been settled out of Court and accordingly got the suit dismis sed and also received half of the institution court fee; about which the complainant was not aware, nor was he informed by the appellant.
The complainant 's allegation is that he was not informed about the dates of hearing of the suit; when inquired he was simply told that the case is posted for filing written statement where his presence was not neces sary.
When nothing was heard by the complainant from the appellant about the progress of his suit, he personally made inquiries and came to learn to his great surprise that the suit in question had in fact been withdrawn as settled out of Court.
The version of the appellant Advocate is that Gautam Chand, his old client, had business dealings with the plaintiffs, Haradara (Complainant) and the defendant Anantaraju.
Anantaraju had also executed an agreement on 9.8.80 to sell his house property to Gautam Chand.
He received earnest money amounting to Rs.35,000 from Gautam Chand.
Anantaraju however did not execute the sale deed within the specified time.
Gautam Chand approached the appellant for legal advice.
The appellant caused the issue of notice to Anantaraju calling upon him to execute the sale deed.
A notice was also issued on behalf of the complainant calling upon the defendant Anantaraju demanding certain amounts due on 3 self bearer cheques amounting to PG NO 362 Rs. 30,098 issued by him in course of their mutual transactions.
Gautam Chand and the complainant were friends having no conflict of interests Gautam Chand instructed the appellant and his junior Ashok that he was in possession of the said cheques issued by Anantaraju and that no amount was actually due from Anantaraju to Haradara Complainant.
Gautam Chand desired Anantaraju to execute the sale deed.
Anantaraju executed the sale deed on 27.11.81 in favour of Gautam Chand, even though an order of attachment before judg ment in respect of the said property was in existence.
Consequent on the execution of the sale deed, the object of the suit was achieved.
The complainant did not at any time object.
In this back ground, the appellant had reasons to believe the information re: settlement of dispute conveyed by the three together on 9.12.81.
Acting on the said informa tion, the appellant asked Ashok his erstwhile junior to take steps to withdraw the suit, which he did on 10.12.8l as per instructions received from the appellant noted on the docket of the brief.
The state Bar Council, called for the comments of the appellant relating to the complaint.
No charge was framed specifying the nature and content of the professional misconduct attributed to the appellant.
Nor were any issues framed or prints for determination formulated.
Instead thereof the Bar Council proceeded to record evidence.
As the case could not be concluded within the time limit, the matter came to be transferred to the Bar Council of India.
The Bar Council off India addressed itself to the three questions, viz. (i) Whether the complainant was the person who entrusted the brief to the appellant and whether the brief was entrusted by the complainant to the appellant.
(ii) Whether report of settlement was made without instructions or knowledge of the complainant? (iii) Who was responsible for reporting settlement and instructions of the complainant ? The Disciplinary Committee of the Bar Council of India after considering the matter found appellant guilty of professional misconduct and suspended him for practising his profession for 3 years on the charge of having withdrawn a suit (not settled) without the instruction of the clients.
PG NO 363 The appellant has filed the appeal u,s 38 of the Advocates Act.
The following questions arose for consideration by this Court.
(i) Whether a specific charge should have been framed apprising the appellant of the true nature and content of the professional misconduct ascribed to him: (ii) Whether the doctrine of benefit of doubt and the need of establishing the basic allegations were present in the mind of the Disciplinary Authority in recording the finding of guilt or in determining the nature and extent of the punishment inflicted on him; (iii) Whether in the absence of the charge and finding of dishonesty against him the appellant could be held guilty of professional misconduct even on the assumption that he had acted on the instructions of a person not authorised to act on behalf of his client if he was acting in good faith and in a bona fide manner.
Would it amount to lack of prudence or non culpable negligence or would it constitute professional misconduct.
Disposing of the appeal, the Court, HELD: That the appellant was not afforded reasonable and fair Opportunity of showing cause inasmuch as he was not apprised of the exact content of the professional misconduct attributed to him and was not made aware of the precise charge he was required to rebut.
[376E F] That in recording the finding of facts on the three questions.
referred to above.
the applicability of the doctrine of benefit of doubt and the need for established the facts beyond reasonable doubt were not realized.
Nor did the Disciplinary Committee consider the question as to whether the facts established that the appellant was acting with bona fides or mala fides whether the appellant was acting with any oblique and dishonest motive.
whether there was any mens rea; whether the facts constituted negligence and if so whether it constituted culpable negligence.
Nor has the Disciplinary Committee considered the question as regards the quantum of punishment in the light of the aforesaid considerations and the exact nature of the professional misconduct established against the appellant.
[376F H; 377A] The Court, in view of the fact that "the matter is one of the ethics of the profession which the law has entrusted to the Bar Council of India" and it is in their opinion, "a case which must receive due weight" did not consider it PG NO 364 appropriate to examine the matter on merits without first having the opinion of the Bar Council of India.
[377D] Remanding the matter to the Bar Council of India the Court directed it to consider whether it would constitute an imprudent act, an unwise act, a negligent act or whether it constituted negligence and if so a culpable negligence, or whether it constituted a professional misconduct deserving severe punishment, even when it was not established or at least not established beyond reasonable doubt that the concerned Advocate was acting with any oblique or dishonest motive or with mala fides.
[377H; 378A] L.D. Jaisinghani vs Naraindas N. Punjabi, and Re: M. vs Distt.
Judge Delhi, [1956] S.C.R. P. 811(814), referred to. |
Criminal Appeal No.185 of 1966.
Appeal by special leave from the judgment and order dated June 3, 1966 of the Allahabad High Court, LuCknow Bench inCriminal Revision Applications No. 410 and 413 of 1964.
R.K. Garg, S.C. Agarwala, section Chakravarti and section S.Shukla, for the appellants.
O.P. Rana and Ravindra Bana, for the respondent.
of 1964.
The appellant, Lalta filed a money suit No. 54 of 1955 in the Court of Civil Judge, Gonda against Swami Nath on the basis of a pronote and receipt dated July 1, 1952 on the allegation that Swami Nath had taken a loan of Rs. 250 from him and executed a promisory note and a receipt in lieu thereof.
Swami Nath filed a written statement in that suit denying to have taken any loan or to have executed any pronote and receipt in favour of Lalta.
It appears that prior to the institution of this suit Swami Nath had filed a complaint on January 24, 1955 against Lalta and others alleging that they had forcibly taken his thumb.
impressions on a number of blank forms of pronotes and receipts.
The case arising out of the Criminal complaint came to be heard by a Magistrate Second Class who by his judgment dated May 31, 1956 acquitted Lalta and the other persons complained against.
The Criminal c 'ase against Swami Nath proceeded on the.
charges framed under sections 342 and 384, Indian Penal Code.
In the Civil Suit which was filed by Lalta, the defendant Swami Nath moved an application for a report being called from the Superintendent, Security Press, Nasik regarding the year of the revenue.
stamps affixed on the pronote and the receipt.
The matter was accordingly referred to the Superintendent, Security Press, Nasik and the report received was that the stamps in question had been printed on December 21, 1953 and were issued for the first time on January 16, 1954 to the Treasury.
Subsequent to the receipt of the report Lalta did not put in appearance and the suit was dismissed for default on June 1, 1956.
The Civil Judge was moved for filing a complaint against the appellants for committing forgery.
The Civil Judge Gonda actually filed a complaint on, November 9, 1956 against Lalta for offences under sections 193, 194, 209, 465, 467 and 471, Indian Penal Code and against Tribeni and Ram Bharosey for 'an offence under section 193, Indian Penal ' Code.
The complaint was enquired into by a First Class Magistrate who committed the appellants to the Court of Sessions.
By his judgment dated November 27, 1963, the Assistant Sessions Judge, Gonda convicted Tribeni and Ram Bharosey under section 467 read with section 109, Indian Penal Code and sentenced them to 3 years rigorous imprisonment.
He found Lalta guility under section 467, Indian Penal Code and sentenced him to 3 years rigorous imprisonment.
Lalta was also convicted under section 471, Indian Penal Code and sentenced to 2 years rigorous imprisonment.
He was also found guilty under section 193, Indian Penal Code and sentenced to rigorous imprisonment for two years.
The appellants took the matter in appeal to the Sessions Judge, Gonda who by his order dated October 17, 1964 set aside the convie 528 tion of Lalta under section 193, Indian Penal Code but maintained the conviction of the appellants under the other sections.
Tribeni, Lalta and Ram Bharosey filed Revision Applications before the Allahabad High Court which by its order dated June 3, 1966 affirmed the order of the Sessions Judge, Gonda and dismissed the Revision Applications.
In support of this appeal Mr. Garg put forward the argument that in view of the fact that Swami Nath 's complaint had been ,dismissed by the Second Class Magistrate on May 31, 1956, the prosecution case with regard to the act of forgery must fail and the conviction of Lalta under section 467 and section 471, Indian Penal ,.Code was not sustainable.
It was also pointed out that the ,charge of abetment against Ram Bharosey and Tribeni under section 467 read with section 109, Indian Penal Code and section 471 read with section 109, Indian Penal Code must fail for the same reason.
In our opinion, the argument put forward on behalf of the appellants is well founded and must be accepted as correct.
In Pritam Singh vs The State of Punjab(1), it was pointed out by this Court that the effect of a verdict of acquittal passed by a competent court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence, but to that it must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to.
the adjudication.
In that case the appellant had been acquitted of the charge under section 19(f), Arms Act for possession of a revolver.
There was a subsequent prosecution of the appellant for ,an offence under section 302, Indian Penal Code and the possession of the revolver was a fact in issue in the later case which had to be established by the prosecution.
It was held that the finding in the former trial on the issue of prossession of revolver will constitute an estoppel against the prosecution, not as a bar to the trial and conviction of the appellant for a different offence but as precluding the reception of ,evidence to disturb the finding of fact.
Section 403, Criminal Procedure Code embodies in statutory form the accepted English rule of autrefois acquit.
The section reads as follows: "403.
(1) A person who has once been tried by a Court of competent jurisdiction for an offence and convicted or acquitted of such offence shall, while such conviction or acquittal remains in force; not be liable to be tried again for the same offence, nor on the same facts for any other offence for which a different charge from the one made against him might have been made (1) A.I.R. 1956 S.C. 415.
529 under section 236, or for which he might have been convicted under section 237.
(2) A person acquitted or convicted of any offence may be afterwards tried for any distinct offence for which a separate charge might have.
been made against him on the former trial under section 235, sub section (1).
(3) A person convicted of any offence constituted by any act causing consequences which, together with such act, constituted a different offence from that of which he was convicted, may be after wards tried for such last mentioned offence, if the consequences had not happened, or were not known to the Court to have happened, at the time when he was convicted.
(4) A person acquitted or convicted of any offence constituted by any acts may, notwithstanding such acquittal or conviction, be subsequently charged with, and tried for, any other offence constituted by the same acts which he may have committed if the Court by which he was first tried was not competent to try the offence with which he is subsequently charged.
(5) Nothing in this section shall affect the provisions of section 26 of the , or of section 18 8 of this Code.
Explanation.
The dismissal of a complaint, the stopping of proceedings under section 249, the discharge of the accused or any entry made upon a charge under section 273, is not an acquittal for the purposes of this section.
" Section 26 of the which is referred to in section 403, Criminal Procedure Code enacts as follows: "Where an act or omission constitutes an offence under two or more enactments, then the offender shall be liable to be prosecuted and punished under either or any of those enactments but shall not be liable to be punished twice for the same offence.
" It is manifest in the present case that.
the appellants cannot plead the bar enacted in section 403(1) of the Criminal Procedure Code.
It is equally manifest that the prosecution of the appellants would be permitted under sub section
(2) of section 403, Criminal Procedure Code.
The question presented for determination in this appeal is, however, different.
The question is whether where an issue of fact has been tried by a competent court on a former occasion and a finding has been reached in favour of an accused, such a 530 finding would constitute an estoppel or res judicata against the prosecution, not as a bar to the trial and conviction of the accused for a different offence but as precluding the reception of evidence to disturb that finding of fact when the accused is tried subsequently even for a different offence which might be permitted by the terms of section 403(2), Criminal Procedure Code.
The distinction between the principle of autrefois acquit and the rule as to issue estoppel; in other words, the objection to the reception of evidence to prove an identical fact which has been the subject matter of an earlier finding between the same parties clearly brought out in the following passage from the judgment Wright,.
J. in The Queen vs OIlis(1): "The real question is whether this relevant evidence of the false pretence on July 5 or 6 ought to have been excluded on the ground that it was part of the evidence given for the prosecution at the former trial, at which the prisoner was charged with having obtained money from Ramsey on that false pretence, and was acquitted of that charge.
" Speaking of this type of estoppel, Dixon, J. stated in The King vs Wilkes ( 2 ): "Whilst there is not a great deal of authority upon the subject, it appears to me that there is nothing wrong in the view that there is an issue estoppel, if it appears by record of itself or as explained by proper evidence, that the same point was determined in favour of a prisoner in a previous criminal trial which is brought in issue on a second criminal trial of the same prisoner.
That seems to be implied in the language used by Wright, J. in R.v. Oilis which in effect I have adoptde in the foregoing statement. . .
There must be a prior proceeding determined against the Crown necessarily involving an issue which again arises in a subsequent proceeding by the Crown against the same prisoner.
The allegation of the Crown in the subsequent proceeding must itself be inconsistent with the acquittal of the prisoner in the previous proceeding.
But if such a condition of affairs arises I see no reason why the ordinary rules of issue estoppel should not apply.
Such rules are not to be confused with those of res judicata, which in criminal proceedings are expressed in the pleas of autrefois acquit and autrafois convict.
They are pleas which are concerned with the judicial determination of an alleged criminal liability and in the case of (1) , 768 769.
(2) ; ,518.
531 conviction with the substitution of a new liability.
issue estoppel is concerned with the judicial establishment of a proposition of law or fact between parties.
It depends upon well known doctrines which control the relitigation of issues which are settled by prior litigation.
" The same question was the subject matter of consideration by the High Court of Australia in a later case Marz vs The Queen(1).
The question at issue was the validity of a conviction for rape after the accused had been acquitted on the charge of murdering the woman during the commission of the act.
In a unanimous judgment by which the appeal of the accused was allowed, the High Court stated as follows : "It is a negation in the alternative upon which, so long as the verdict stood in its entirety, the applicant was entitled to rely as creating an issue estoppel against the Crown.
He was entitled to rely upon it because when he pleaded not guilty to the indictment of murder the issues which were thereby joined between him and the Crown necessarily raised for determination the existence of the three elements we have mentioned and the verdict upon those issues must, for the reasons we have given, be taken to have affirmed the existence of the third and to have denied the existence of one or other of the other two elements.
It is nothing to point that the verdict may have been the result of a misdirection of the judge and that owing to the misdirection the jury may have found the verdict without understanding or intending what as a matter of law is its necessary meaning or its legal consequences.
The law which gives effect to issue estoppels is not concerned with the correctness or incorrectness of the finding which amounts to an estoppel, still less with the processes of reasoning by which the finding was reached in fact; it does not matter that the finding may be thought to be due to the jury having been put upon the wrong track by some direction of the presiding judge or to the jury having got on the wrong track unaided.
It is enough that an issue or issues have been distinctly raised and fou nd.
Once that is done, then, so long as the finding stands, if there be any subsequent litigation between the same parties, no allegations legally inconsistent with the finding may be made by one of them against the other.
" It is therefore clear that section 403, Criminal Procedure Code does not preclude the applicability of this rule of issue estoppel.
(1) ; , 68 69.
532 It was contended by Mr. Rana on behalf of the respondent that the decision of this Court in Pritam Singh 's case(x) was based on the observations of the Judicial Committee in Sambasivam vs Public Prosecutor, Federation of Malaya(2) and the decision in Pritam Singh 's case(1) required reconsideration because the principle could have no application ,to India where the principle of autrefois acquit is covered by a statutory provision viz., section 403, ' Criminal Procedure Code which must be taken to be exhaustive in character.
We are unable to accept this contention as right.
We have already pointed out that section 403, Criminal Procedure Code does not preclude the applicability of the rule of issue estoppel.
In any event, the rule is one which is in accordance with sound principle and supported by high authority and there are already two decisions of this Court, viz., Pritam Singh 's case(1) and a later case Manipur Administration vs Thokchom, Bira Singh(3) which have accepted the rule .as a proper one to be adopted.
We therefore do not see any reason for casting any doubt on the soundness of the rule or for taking a different view from that adopted in the two earlier decisions of this Court referred to.
If the rule of issue estoppel is applied to the present case, it follows that the charge with regard to forgery must fail against all the appellants.
The reason is that the case of Swami Nath is solely based upon the allegation that his thumb impressions were obtained.
on blank forms of promissory notes and receipts on January 7, 1955 by the use of force.
If the finding of the Second Class Magistrate on this issue is final and cannot be reopened, the substratum of the present prosecution case fails and the charges of forgery under sections 467 and 471, Indian Penal Code cannot be established against any of the appellants.
For these reasons we hold that this appeal must be allowed, the judgment of the Allahabad High Court dated June 3, 1966 must be set aside and the convictions of each of the appellants and the sentence imposed upon them should be quashed.
If the appellants are still in jail they should be set at liberty forthwith.
V.P.S. Appeal allowed.
(1) A.I.R. 1956 S.C. 415.
(2) (3) ; L3Sup.
C.I/69 2,500 19 1 70 GIPF. | The first appellant filed a suit on a promissory note.
Prior to the institution of the suit, the executant of the promissory note had filed a complaint against the appellants alleging that they had forcibly taken his thumb impressions on a number of blank forms of promissory notes.
The Magistrate 'acquitted the, appellants.
Thereafter.
the suit on the promissory note was dismissed on the ground that the promissory note was a forgery because, the stamps affixed were of a date later than that of the promissory note.
The Court then filed a complaint against the appellants for the offence of forgery.
The appellants were convicted for forgery and abetment of forgery.
In appeal to this Court, HELD: In the earlier criminal case, the allegation that the executant 's thumb impressions on blank forms were obtained by force, was found to be false.
That finding was final and could not be reopened because of the rule as to issue estoppel.
Therefore, the sub stratum of the present case failed and the appellants could not be convicted for the offence of forgery and its abetment.
[532 D F] The rule of issue estoppel is not covered by section 403, Criminal Procedure Code, which deals with the principle of autrefois acquit: but that section does not preclude the applicability of the rule.
The rule is in accordance with sound principle and was applied in two decisions of this Court, namely, Pritam Singh vs State of Punjab, A.I.R. 1956 S.C. 415 and Manipur Administration vs Thockechom Bira Singh, ; There is no reason for casting any doubt on its soundness or for taking a different view.
[532 B D] |
Appeal No. 501 of 1957.
Appeal by special leave from the judgment and order dated September 13, 1954, of the Bombay High Court in Income tax Reference No. 13 of 1954.
K. N. Rajagopala Sastri and D. Gupta, for the appellant.
A. V. Viswanatha Sastri and P. L. Vohra, for the respondent.
April 6.
The Judgment of section K. Das, J. L. Kapur, M. Hidayatullah and T. L. Venkatarama Aiyar, JJ. was delivered by Venkatarama Aiyar, J. J. C. Shah, J. delivered a separate Judgment.
VENKATARAMA AIYAR, J.
The respondents were the owners of a steamship called "El Madina".
That was requisitioned by the Government during the last world war, and was lost by enemy action on March 16, 1944.
As compensation therefore, the Government paid the respondents Rs. 20,00,000 on July 17, 1944; Rs. 23,00,000 on December 22, 1944; and Rs. 33,333 on August 10, 1946.
The original cost of the ship was Rs. 24,95,016 and its written down value at the commencement of the year of account was Rs. 15,68,484.
The difference between the cost price and the written.
down value viz., Rs. 9,26,532 represents the deductions which had been allowed year after year on account of depreciation.
As the total compensation received exceeded the cost price, the respondents have recouped themselves all the amounts deducted for depreciation.
792 On these facts, the point in controversy between the respondents and the Department is whether the amount of Rs. 9,26,532 is liable to be included in the total income of the company for the year of assessment which is 1946 47.
The provision of law under which the charge is sought to be imposed is section 10(2)(vii) of the Indian Income tax Act, 1922, hereinafter referred to as the Act, and that is, omitting what is not relevant, as follows: "(2) Such profits or gains shall be computed after making the following allowances, namely: (vii) in respect of any such building, machinery or plant which has been sold or discarded or demolished or destroyed, the amount by which the written down value thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value: Provided further that where any insurance, salvage or compensation moneys are received in respect of any such building, machinery or plant as aforesaid, and the amount of such moneys exceeds the difference between the written down value and the scrap value no amount shall be allowable under this clause and so much of the excess as does not exceed the difference between the original cost and the written down value less the scrap value shall be deemed to be profits of the previous year in which such moneys were received:".
It is not disputed by the respondents that the sum of Rs. 9,26,532 would be profits liable to be taxed under this proviso, if it applies.
Equally it is not disputed by the appellant that apart from this proviso the amount in question could only be regarded as capital receipt, not liable to be taxed.
Before the income tax authorities, the respondents sought to avoid the application of this proviso on the ground that on representations made by them with reference to this very matter, the Board of Revenue had directed that for the purpose of Rule 4, Schedule II, of the Excess Profits Tax Act, 1940, the amount payable as 793 compensation (both the initial advance as well as any further payment that may be made) should be taken into account as though it had actually been received within thirty days of the date of the loss of the ship; and that in consequence the amount should be deemed to have been received on April 16, 1944.
If that contention is correct, the amounts would have been received not in the year of account which was July 1, 1944, to June 30, 1945, but in the year previous there to, and they could not therefore be included in the income of the company for the year of assessment.
This contention, however, was rejected by all the income tax authorities.
Dealing with it, the Appellate Tribunal observed in its Order dated July 15, 1953, that the concession which the Board of Revenue had intended to give was limited to excess profits tax, and could not in any event be relied on for the purpose of cutting down the operation of the statutory provision enacted in the relevant proviso ins.
10(2)(vii); and that the material date was when the compensation was in fact received and that was in the year of account and not when it became due and payable, in the year previous thereto.
In the result, the Tribunal held that the amount was liable to be included in the total income of the company.
The respondent then filed an application before the Tribunal, under section 66(l) of the Act, requiring certain questions to be referred to the court, and one of them was as follows: "Whether in view of the fact that the 4th proviso to section 10(2)(vii) of the Indian Income tax Act did not apply to the assessment for the Assessment year 1945 46 and under the law in force as applicable to that assessment year the sum of Rs. 9,26,532 which accrued in the previous year relevant to that Assessment year was not taxable at all, and the fact that having regard to the Assessee 's method of accounting the said sum should not be assessed in any other year, the Assessment in respect of the ' said sum in the subsequent Assessment year 1946 47 was valid in law." 794 By its order dated February 9, 1954, the Tribunal referred the following question for the opinion of the court: "whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income computed for the assessment year 1946 47.
" The reference came up for hearing before a Bench of the Bombay High Court consisting of Chagla, C.J., and Tendolkar, J., and then the respondents raised the contention that the proviso to section 10(2)(vii) under which the charge was made could not be taken into account in making the present assessment, as the same had been introduced by the Income tax (Amendment) Act, 1946 (VIII of 1946), which came into force on May 4, 1946, whereas the liability of the company to be taxed fell to be determined as on April 1, 1946, when the Finance Act, 1946, came into force.
The appellant raised a preliminary objection to this question being raised for the first time before the court, on the ground that it did not arise out of the Order of the Tribunal, having been neither raised before it nor dealt with by it, and that further it had not been referred to the court.
Overruling this objection, the learned Judges observed that the form in which the question was framed was sufficiently wide to take in the new contention, that even if the particular aspect of the question had not been argued before the Tribunal, it was implicit in the question as.
framed, and that therefore the assessee could raise it.
On the merits they held that as the proviso was not retrospective in its operation, the amount in question was not liable to be included in the taxable income and answered the question in the negative.
It is against this decision that the present appeal by special leave is directed.
The main contention urged before us by the appellant is that it was not open to the High Court in the present reference to go into the question as to the applicability of the proviso to section 10(2)(vii), as it was neither raised before the Tribunal nor considered by it, and could not therefore be said to be a question arising out of the order of the Tribunal, which alone could be 795 referred for the decision of the court under section 66(l).
The court had no jurisdiction, it is argued, to allow a question to be raised before it, which could not be referred to it under the section.
The contention of the respondents is that all questions of law which arise on the findings given by the Tribunal in its order can properly be said to arise out of its order, and that in making a reference under section 66(l), the Tribunal is not limited to those questions only which were raised before it and dealt with in its order, nor even to those questions which were raised in the application for reference under section 66(l).
It is further contended that in the present case, the question as framed and refer red was wide enough to take in the contention as to the applicability of the proviso and that the High Court was in consequence within its power in entertaining it and deciding the reference on it.
We may now refer to the provisions of law bearing on the question.
Section 66(l) of the Act confers on the assessee and the Commissioner a right to apply to the Tribunal in the prescribed form to refer any question of law arising out of its order for the decision of the High Court.
If the Tribunal is satisfied that a question of law arises, then it has to draw up a statement of the case, and refer it to the decision of the High Court.
But if it considers that no question of law arises on its order, and dismisses the application under section 66(l), then the assessee or the Commissioner, as the case may be, has a right to move the court under section 66(2), and if the court is not satisfied about the correctness of the decision of the Tribunal, it can require it to state the case and refer it to its decision.
Under section 66(4) the High Court can, for the purpose of disposing of the reference which comes to it under section 66(l) and (2), call for additional statement from the Tribunal.
Under section 66(5) the High Court is to decide the question of law raised in the case and send a copy of its judgment to the Tribunal and the latter is to pass appropriate orders for giving effect to it.
Section 59 of the Act confers on the Central Board of Revenue power to make rules for carrying out the purpose of the Act and under sub section (5), the rules 796 made thereunder shall on publication in the official gazette have effect as if enacted under the Act.
Rule 22A framed under this section provides that: "An application under sub ,section (1) of section 66 requiring the Tribunal to refer to the High Court any question Of law shall be in the following form.
" The form is R(T) of which paragraphs 3 to 5 are relevant for the present discussion, and they are as follows: "3.
that the facts which are admitted and/or found by the Tribunal and which are necessary for drawing up a statement of the case, are stated in the enclosure for ready reference.
4. .that the following questions of law arise out of the order of the Tribunal: (3) 5. .that the applicant, therefore, requires under sub section (1) of section 66 of the aforesaid Act that a statement of the case be drawn up and the questions of law numbered out of the questions of law referred to in paragraph 4 above be referred to the High Court.
" On these provisions, the question that arises for decision is whether in a reference under section 66, the High Court can consider a question which had not been raised before the Tribunal and/or dealt with by it in its order even though it be one of law.
On the answer to be given to it there has been a difference of opinion among the High Courts and that turns on the meaning to be given to the words, "any question of law arising out of" the order of the Tribunal.
There is no pronouncement of this Court which concludes this ques tion, though there are decisions which afford guidance in the determination thereof.
These decisions will now be considered.
In Commissioner of Income tax, Madras vs Mtt.
Arunachalam Chettiar (1), an order of assessment made by the income tax officer was corrected by the Appellate Tribunal not in an appeal under section 33(4) but in a miscellaneous application presented to it under (1) (1953] S.C.R. 463 471.
797 section 35.
The Commissioner being dissatisfied with the order applied for a reference under section 66(l).
The Tribunal was of the opinion that the order in question could be made in the exercise of its inherent jurisdiction and referred the question of its legality to the court under section 66(l).
The Madras High Court declined to answer it on the ground that as the order was not one passed in an appeal, the reference under section 66(l) was incompetent, as under that provision the power of the Tribunal to refer was limited to questions of law arising out of an order passed in an appeal.
In affirm ing this decision, this Court observed: "The jurisdiction of the Tribunal and of the High Court is conditional on there being an order by the Appellate Tribunal which may be said to be one under section 33(4) and a question of law arising out of such an order." This is an authority for the position that the jurisdiction of the Tribunal to make, and of the High Court to hear, a reference must be strictly sought within the four corners of section 66.
In The Commissioner of Income tax, Bombay South vs Messrs. Ogale, Glass Works Ltd. (1), the question referred by the Tribunal under section 66(l) was whether certain amounts received by the assessee from the Government by cheques drawn on the Reserve Batik at Bombay were income received in British India within section 4(l)(a) of the Act.
The High Court had held that.
as the cheques were received in the State of Aundh, in unconditional discharge of the claim, the receipt was not in British India.
On appeal to this Court, it was contended that as the cheques were posted in British India, the income must be held to have been received in British India.
An objection was put forward to this contention being raised, on the ground that it was not argued before the Tribunal or decided by it and that therefore it did not arise out of its order as required by section 66(l).
But this Court hold that as the question as framed and referred was of sufficient amplitude to cover the new point urged, and as no contention was raised that the question had not (1). [1955] 1 S.C.R. 185, 197.
798 been properly referred under section 66(l), it could be decided under section 66(5), and that in that view, it was not necessary "to express any opinion on the larger question as to the scope, meaning and import of the words 'any question of law arising.
out of ' the Tribunal 's order on the interpretation of which there exists a wide divergence of judicial opinion".
There was accordingly no decision on the point now under consideration.
In New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax (1) the point under discussion wag whether the High Court was competent under section 66(4) to call for additional statement with reference to a question which had not been referred to it under section 66(l) or section 66(2).
This Court held that the scope of a reference under section 66(2) was coextensive with that of one under section 66(l) of the Act, that therefore the court had no power under section 66(2) to travel beyond the ambit of section 66(l), that under both these provisions it is only a question of law arising out of the order that could be referred, that the object of section 66(4) was to enable the court to obtain additional statements only for the purpose of deciding questions referred under section 66(l) and (2) and that accordingly no investigation could be ordered in respect of new questions which were not and could not be the subject matter of a reference under section 66(l) and (2).
Here again there was no decision on the meaning of the words, "any question of law arising out of" the order of the Tribunal.
In Kusumben D. Mahadevia vs Commissioner of Income tax (2), the question actually referred 'under section 66(l) to the court was whether a sum of Rs. 47,120 received by the assessee had accrued to her in the former State of Baroda or whether it had accrued or should be deemed to have accrued to her in British India.
On this reference the High Court resettled the question so as to raise the contention as to whether the assessee was entitled to any concession under the Merged States (Taxation Concessions) Order, 1949, as regards the income of Rs. 47,120, and holding that she was not, answered the reference against her (1) ; (2) [196O] 3 S.C.R. 417. 422. 799 without deciding the question as to where the income accrued.
Against this Judgment, the assessee appealed to this Court and contended that the High Court was in error in not deciding the question which was actually referred.
This Court accepted this contention and remanded the case to the High Court for hearing on that point.
So far this decision does not bear on the present controversy.
But a further point was discussed and considered by this Court, and that was that it was not open to the court to raise the question about the applicability of the Merged States (Taxation Concessions) Order, 1949, as that was not a question which was raised before or considered by the Tribunal or referred under section 66(l).
In agreeing with this contention, this Court observed: "Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal.
It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order.
It is possible that the same question of law may involve different approaches for its solution, and the High Court may amplify the question to take in all the approaches.
But the question must still be one which was before the Tribunal and was decided by it." These observations bear on the question now under consideration but the actual decision was one remanding the case with a direction to the High Court to decide the question that was referred to it.
In Zoraster & Co. vs Commissioner of Income tax (1), the assessees were manufacturers of certain kinds of goods in Jaipur.
The Government of India purchased these articles and paid the price by cheques on the Bombay branch of the Reserve Bank of India.
The Tribunal held that the profits of these sales had been received in British India, but on the application of the assessees referred that question to the court.
The High Court remanded the case to the Tribunal under section 66(4) for a supplemental statement observing that (1) [1961] 1 S.C. It.
800 "it would be necessary for the Appellate Tribunal to find, inter alia, whether the cheques were sent to the assessee firm by post or by hand and what directions.
, if any, had the assessee firm given to the Department in the matter.
" The correctness of this order was challenged by the assessee on the ground that the court had no power to call for a fresh statement for the investigation of a new point and reliance was placed on the decision in New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax (1).
This Court held, following that decision, that the jurisdiction to call for supplemental statement was confined (a) to the facts on record and/or found by the Tribunal, and (b) to the question which would arise from the Tribunal 's order; and that further it could be exercised with reference to a new question, if it was an integral or even incidental part of the question which had been referred.
This decision also proceeds on the view that a question which is unconnected with the question already referred cannot be agitated for the first time in the reference.
There being thus no direct decision of this Court on the precise meaning of the words "any question of law arising out of" the order of the Tribunal, we must examine the decision of the High Courts on the question, and as already stated they are in a state of conflict.
In A. Abboy Chetty and Co. vs Commissioner of Income tax, Madras (2), the application of the assessee under section 66(l) required the Tribunal to refer a question of res judicata to the court.
The Tribunal declined to do so on the ground that question had not been argued before it.
The assessee then moved the court under section 66(2) for an order requiring the Tribunal to refer that question.
Dismissing that application, Patanjali Sastri, J., as be then was, observed as follows: " Mr. Radhakrishnayya for the petitioner contends that a question, though not raised before the Appellate Tribunal, can well be said to 'arise out of its order ', if, on the facts of the case appearing from the order, the question fairly arises.
I am unable (1) ; (2) ,444. 801 to agree with that view.
I am of opinion that a question of law can be said to arise out of an order of the Appellate Tribunal only if such order discloses that the question was raised before the Tribunal.
" Adverting to the contention that the Privy Council had in M. E. Moola Sons Limited vs Burjorjee (1) allowed a question of law arising on the facts found, to be raised for the first time before it, the learned Judge observed: "The case furnishes no useful analogy as the scope of the remedy under section 66 of the Indian Income tax Act has to be determined with reference to the language of the statute".
This decision was followed by the Madras High Court in Commissioner of Income tax vs Modern Theatres Ltd., (2) and in The Trustees, Nagore Durgah vs Commissioner of Incometax (3).
In G. M. Chenna Basappa vs Commissioner of Income tax (4), the Andhra High Court followed the decision in A. Abboy Chetty and Co. vs Commissioner of Income tax, Madras (5) and observed that a question not raised before the Tribunal "cannot be said to arise out of its order even if it could be sustained on the facts in the statement of the case by the Tribunal", and that further the order of the Tribunal should disclose that the point of law was raised before it.
The same view was adopted by the Patna High Court in Maharaj Kumar Kamal Singh vs Commissioner of Income (ax (6).
There, discussing the question with reference to the language of section 66(1) and (2) and Rule 22A, the court observed as follows: "The provisions of Section 66(1) and Section 66(2) do not confer upon the High Court a general jurisdiction to correct or to decide a question of law that may possibly arise out of the income tax assessment.
The section, on the contrary, confers a special and limited jurisdiction upon the High Court to decide any specific question of law which (1) Rang.
(3) (5) , 444.
(2) (4) (6) , 86. 802 has been raised between the assessee and the Department before the Income tax Tribunal and upon which question the parties are at issue.
" It was accordingly held that only a question of law which had been actually raised before the Tribunal or actually dealt with by it could be referred under section 66(1).
This is also the view consistently held by the Calcutta High Court, III Commissioner of Excess Profits Tax vs Jeewanlal Ltd. (1), it was held, agreeing with the decision in A. Abboy Chetty and CO.
V. Commissioner of Income tax, Madras (2), that a question of law not raised before the Tribunal could not be said to arise out of its order even if on the facts of the case appearing from the order the question fairly arises.
In Chainrup Sampatram vs Commissioner of Income, tax (3), the assessee had applied under section 66(1) of the Act to refer the question whether a sum of Rs. 2,20,887 was on a true construction of section 14(2)(c) of the Act assessable to tax.
The Tribunal dismissed the application on the ground that the question sought to be raised had not been mentioned at the hearing of the appeal and had not been dealt with by the Tribunal and was therefore not one which arose out of its order.
The question having been brought up before the court under section 66(2), Chakravartti, J. held that under section 66(1) it was only a question that arose out of the Tribunal 's order that could be referred, and that that must be some question which was actually raised before the Tribunal and dealt with by it; and that under section 66(2) the words, "no question of law arises" could only mean that the question of which reference had been asked for by the applicant did not arise,, and that the High Court could not require the Tribunal to refer some question which was not proposed before it.
The learned Judge then went on to observe: "The Indian Income tax Act has not charged the High Court with the duty of setting right in all respects ill assessments that might come to its notice; its jurisdiction is not either appellate or revisional; (1) (2) ,444.
(3) , 495.
803 nor has it a general power of superintendence under Section 66.
Its sole duty is to serve as the appointed machinery for resolving any conflict which may arise between an assessee or the Commissioner on the one hand and the Tribunal on the other regarding some specific question or questions of law.
If, on an application under section 66(2), the High Court finds that the question which the applicant required the Tribunal to refer was not a question that arose out of the Tribunal 's appellate order, it ought, in my view, to refuse to require the Tribunal to refer any such question.
" The same view was taken in Allahabad Bank Ltd. vs Commissioner of Income tax (1) and in Commissioner of Income tax vs State Bank of India (2).
In Mash Trading Co. vs Commissioner of Income tax (3), a Full Bench of the Punjab High Court had to consider the true character of the jurisdiction under section 66.
Therein Kapur, J., as he then was, held, on an examination of the section and on a review of the authorities that under section 66(1) it is only questions which had been raised before and dealt with by the Tribunal that could be referred to the High, Court, that the power of the High Court under section 66(2) to direct a reference is limited to questions which could be referred under section 66(1) and which the applicant required it to refer, that the Tribunal has no power to raise a question suo motu, and likewise the High Court cannot raise any question which had not been referred to it either under section 66(1) or section 66(2), but when once a question is properly raised and referred to the High Court, the High Court is bound to answer that question.
In this view, it was held that a reference to the High Court on a question which was not raised before or considered by the Tribunal was not compe tent.
Falshaw, J., while generally agreeing with this view considered that there might be cases in which strict adherence to this view might work injustice, as for example when a point raised before the Tribunal had not been dealt with by it owing to mistake or (1) (2) (3) 804 inadvertence, or when its jurisdiction itself was ques tioned.
The learned Judge added that in the former case the point might be deemed to have been decided against the assessee in the order, thereby attracting section 66.
It should be noted that all the Judges agreed in holding that the reference in question was incompetent as the point had not been raised before the Tribunal.
We must now consider the decisions which have taken a somewhat different view.
Vadilal Lallubhai Mehta vs Commissioner of Income tax (1) was a case under section 66 of the Act, as it stood prior to the amendment of 1939 and what was held there was that even though the assessee had not stated in his application for reference the questions which really arose out of the order, it was for the Commissioner to formulate the correct questions and refer them to the court, and where he had failed to do so, the court could direct him to do so.
This is not a decision on the question as to whether questions not raised before or decided by the Commissioner could be held to be questions arising out of his order.
In New Piece goods Bazar Co. Ltd. V. Commissioner of Income tax (2), the question that was referred under section 66(1) was whether taxes paid on urban immovable property by the assessee were an allowable deduction under section 9(1)(iv) and section 9(1)(v) of the Indian Income tax Act.
An objection was raised before the court that the question as to the application of section 9(1)(iv) had not been argued before the Tribunal and therefore it could not be referred.
Repelling this contention, Kania, J., as he then was, observed that the specific question had been put forward as a ground of appeal, and that was "quoted by the Tribunal in its judgment" but not dealt with by it, and that in the circumstances the proper order to pass was to refer the case back to the Tribunal and "invite it to express ' its opinion on this aspect of the contention and raise a proper question of law on that point also." This judgment.
again proceeds on the view that it is only a question raised before and dealt with by the Tribunal (1) (2) 805 that could be referred under section 66(1), and that is clear from the observations of the learned Judge that the decisions of the Privy Council in Commissioner of Income tax vs Kameshwar Singh(1) and National Mutual Life Association V. Commissioner of Income tax (2), deprecating the practice of raising new questions in the, stage of argument on the reference in the High Court did not stand in the way of the case being referred back to the Tribunal.
In Madanlal Dharnidharka V. Commissioner of Income tax (3), the Tribunal referred under section 66(1) the following question for the decision of the court: "Whether the remittance of Rs. 2,01,000 out of profits, made by the assessee in the years preceding the Maru year 1999 2000 as a nonresident, could be included tinder section 4(1)(b)(iii) of the Indian Income tax Act in his total income of the year of account in which he was a resident in British India?" This question had not been argued before the Tribunal, but the Tribunal itself referred it because it considered that it arose out of its order.
The reference was heard by Chagla, C. J. and Tendolkar, J.
Before them an objection was raised that the Tribunal could not refer this question under section 66(1) as the same had not been raised before it.
Chagla, C. J., observed: "In my opinion it is necessary clearly to re state the jurisdiction of this court.
This is not a Court of appeal.
This court merely exercises an advisory jurisdiction.
Its judgments are in the nature of advice given on the questions submitted to it by the Tribunal.
Its advice must be confined to questions referred by the Tribunal to this court and those questions must be questions of law which must arise out of the order made by the Tribunal.
Now, looking at the plain language of the section apart from any authority, I should have stated that a question of law arose out of the order of the Tribunal if such a question was apparent on the order itself or it could be raised on the facts found by the (1) (2) (3) , 233, 234.
806 Tribunal and which were stated in the order.
I see no reason to confine the jurisdiction of this court to such questions of law as have been argued before the Tribunal or are dealt with by the Tribunal.
The section does not say so and there is no reason why we should construe the expression 'arising out of such order ' in a manner unwarranted by the ordinary grammatical construction of that expression.
This court has no jurisdiction to decide ques tions which have not been referred by the Tribunal.
If the Tribunal does not refer a question of law under section 66(1) which arises out of the order then the only jurisdiction of the court is to require the Tribunal to refer the same Under section 66(2).
It is true that the court has jurisdiction to resettle questions of law so as to bring out the real issue between the parties but it is not open to the court to raise new questions which have not been referred to it by the Tribunal.
" Expressing next his disagreement with the decision of the Madras High Court in A. Abboy Chetty and Co. vs Commissioner of Income tax, Madras (1), the learned Judge observed: "The decision of the Madras High Court would also result in this extraordinary situation.
An assessee may raise a question and argue it before the Tribunal, but if the Tribunal thought fit to ignore that argument and not to refer to that point of law in its order, then the court would have no jurisdiction to call upon the Tribunal to refer that question of law to the High Court.
It is true that the Income tax Act is a very technical statute, but I see no reason why when the plain grammatical construction of the section does not make it necessary to come to that conclusion it is necessary to do so and arrive at such an anomalous result.
" In Mohanlal Hiralal vs Commissioner of Income tax (2) a Bench of the Nagpur High Court, hearing a reference under section 66(1), held that on the statement of the case by the Tribunal, the question of law as framed was not correct.
Then observing that in view (1) (2) , 452 453. 807 of the decision of the Privy Council in Commissioner of Income tax vs Kameshwar Singh (1), it could not itself resettle it, called for a fresh statement from the Tribunal under section 66(4).
Thus far the judgment is on the same lines as New Piecegoods Bazar Co. Ltd. vs Commissioner of Income tax (2) and an earlier decision of the Nagpur High Court in Beohar Singh vs Commissioner of Income tax (3).
When the case came back on the further statement under section 66(4), criticising certain remarks therein, that the court had no power to direct the Tribunal to refer a question not argued before it, the Court observed that they were made under a misconception, and quoted the observations of Chagla C.J., in Madanlal Dharnidharka vs Commissioner of Income tax (4) extracted above, with approval.
This can hardly be said to be a decision on the present point.
It will be seen from the foregoing review of the decisions that all the High Courts are agreed that section 66 creates a special jurisdiction, that the power of the Tribunal to make a reference and the right of the litigant to require it, must be sought within the four corners of section 66(1), that the jurisdiction of the High Court to hear references is limited to questions which are properly referred to it under section 66(1), and that such jurisdiction is purely advisory and extends only to deciding questions referred to it.
The narrow ground over which the High Courts differ is as regards the question whether it is competent to the Tribunal to refer, or the High Court to decide, a question of law which was not either raised before the Tribunal or decided by it, where it arises 'on the facts found by it.
On this question, two divergent views have been expressed.
One is that the words, "any question of law arising out of" the order of the Tribunal signify that the question must have been raised before the Tribunal and considered by it, and the other is that all questions of law arising out of the facts found would be questions of law arising out of the order of the Tribunal.
The 1latter is the view (1) (3) (2) (4) , 233.
234. 808 taken by the Bombay High Court in Madanlal Dharnidharka vs Commissioner of Income tax(1), and approved by the Nagpur High Court in Mohanlal Hiralal vs Commissioner of Income tax (2).
The former is the view held by all the other High Courts.
Now the argument in support of the latter view is that on the plain grammatical construction of section 66(1), any question of law that could be raised on the findings of fact given by the Tribunal, would be questions that arise out of the order, and that, to hold that they meant that the question must have been raised before the Tribunal and decided by it, would be to read into the section words which are not there.
In support of this contention Shri Viswanatha Sastri, learned Counsel for the respondents, argued that it was a fundamental principle of jurisprudence that the duty of the litigants was only to state the facts and that it was for the court to apply the appropriate law to the facts found, arid he relied on the observations of Atkin, L. J., in Attorney General vs Avelino Aramavo & Co.(1), that the court was not limited to particular questions raised by the Commissioners in the form of questions on the case, and that if the point of law or the erroneous nature of the determination of the point of law was apparent on the case as stated and there were no further facts to be found, the court could give effect to it. , He also maintained that the position under the Indian law was the same as under the British statute, because under section 66(1) of the Act, the Tribunal has to refer not only questions of law arising out of its order, but also a statement of the case, that under section 66(2) the court can likewise require the Tribunal to state the case and refer it and that under section 66(5) the court has to decide the question of law raised by the case.
We are unable to agree with this contention.
Under the British statute when once a decision is given by the Commissioners, it is sufficient that the assessee should express his dissatisfaction with it and ask that the matter be referred to the decision of the High Court.
(1) [1948]16 I.T.R. 227.
(2) (3) 809 It is then for the Commissioners to draw up a statement of the case and refer it for the decision of the court.
The British statute does not cast, as does section 66(1) of the Act, a duty on the assessee to put in an application stating the questions of law which he desires the Commissioners to refer to the court and requiring them to refer the questions which arise out of that order.
In Commissioner of Income tax, Madras vs Mtt.
section Ar.
Arunachalam Chettiar (1), this Court has decided that the requirements of section 66(1) are matters affecting the jurisdiction to make a reference under that section.
The attempt of the respondents to equate the position under section 66(1) of the Act with that under the British statute on the ground that the Tribunal has to draw up a statement of the case and refer it, and that the court is to decide questions of law raised by it, must break down when the real purpose of a statement in a reference is kept in view.
A statement of case is in the nature of a pleading, where in all the facts found are set out.
There is nothing in it which calls for a decision by the court.
It is the question of law referred under section 66(1) that calls for decision under section 66(5) and it is that that constitutes the pivotal point on which the jurisdiction of the court hinges.
The statement of the case is material only as furnishing the facts for the purpose of enabling the court to decide the question referred.
It has been repeatedly laid down by the Privy Council that the Indian Act is not in pari materia with the British statute and that it will not be safe to construe it in the light of English decisions, vide Commissioner of Income tax vs Shaw Wallace & Co. (2).
In view of the difference between section 66(1) and the corresponding provision in the British statute, we consider that no useful purpose will be served by referring to the English decisions for interpreting section 66.
But the main contention still remains that the language of section 66(1) is wide enough to admit of questions of law which arise on the facts found by the Tribunal and that there is no justification for cutting (1) ; , 471.
(2) (1932) L.R. 59 I. A. 206.102 810 down its amplitude by importing in effect words into it which are not there.
There is considerable force in this argument.
But then there are certain features, which distinguish the jurisdiction under section 66, and they have to be taken into consideration in ascertaining the true import of the words, "any question of law arising out of such order.
" The jurisdiction of a court in a reference under section 66 is a special one, different from its ordinary jurisdiction as a civil court.
The High Court, hearing a reference under that section, does not exercise any appellate or revisional or supervisory jurisdiction over the Tribunal.
It acts purely in an advisory capacity, on a reference which properly comes before it under section 66(1) and (2).
It gives the Tribunals advice, but ultimately it is for them to give effect to that advice.
It is of the essence of such a jurisdiction that the court can decide only questions which are referred to it and not any other question.
That has been decided by this Court in New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax(2); Kusumben D. Mahadevia vs Commissioner of Income tax(2) and Zoraster & Co. vs Commissioner of Income tax (3).
If the true scope of the jurisdiction of the High Court is to give advice when it is sought by the Tribunal, it stands to reason that the Tribunal should have had an occasion to consider the question so that it may decide whether it should refer it for the decision of the court.
How can it be said that the Tribunal should seek for advice on a question which it was not called upon to consider and in respect of which it had no opportunity of deciding whether the decision of the court should be sought? It was argued for the respondents, that, in view of the fact that the court could compel the Tribunal to refer a question of law under section 66(2) for its decision, not much significance could be attached to the advisory character of its jurisdiction.
It is not conceivable, it was said, that any authority should have a right to compel another authority to take its advice.
We see no force in this contention.
Section 66(2) (1) ; (2) ; (3) ; 811 confers on the court a power to direct a reference only where the Tribunal was under a duty to refer under section 66(1), and it is, therefore, subject to the same limitations as section 66(1).
That has been held by this court in New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax (1) and in Zoraster & Co. vs Commissioner of Income tax (2).
Moreover, the power of the court to issue direction to the Tribunal under section 66(2) is, as has often been pointed out, in the nature of a mandamus and it is well settled that no mandamus will be issued unless the applicant had made a distinct demand on the appropriate authorities for the very reliefs which he seeks to enforce by mandamus and that had been refused.
Thus, the power of the court to direct a reference under section 66(2) is subject to two limitations the question must be one which the Tribunal was bound to refer under section 66(1) and the applicant must have required the Tribunal to refer it.
R(T) is the form prescribed under Rule 22A for an application under section 66(1), and that shows that the applicant must set out the questions which he desires the Tribunal to refer and that further, those questions must arise out of the order of the Tribunal.
It is, therefore, clear that under section 66(2), the court cannot direct the Tribunal to refer a question unless it is one which arises out of the order of the Tribunal and was specified by the applicant in his application under section 66(1).
Now,, if we are to hold that the court can allow a new question to be raised on the reference, that would in effect give the applicant a right which is denied to him under section 66(1) and (2), and enlarge the jurisdiction of the court so as to assimilate it to that of an ordinary civil court of appeal.
It is again to be noted that, whereas section 6P(1), as it stood prior to the amendment of 1939, conferred on the Commissioner a power to refer a question of law to the court suo motu, that power has been taken away under the present section and it has accordingly been held that under section 66(1), as it now stands, there is no power in the Tribunal to refer a question of law suo motu for the decision of the court.
If, as contended (1) ; (2) ; 812 for by the respondents, the court is to be held to have power to entertain in a reference, any question of law, which arises on the facts found by the Tribunal, its jurisdiction under section 66(5) must be held to be wider than under section 66(1) and (2).
The correct view to take, in our opinion, is that the right of the litigant to ask for a reference, the power of the Tribunal to make one, and the jurisdiction of the court to decide it are all co extensive and, therefore, a question of law which the applicant cannot require the Tribunal to refer and one which the Tribunal is not competent to refer to the court, cannot be entertained by the court under section 66(5).
In view of the above considerations, we are unable to construe the words, "any question of law arising out of such order," as meaning any question of law arising out of the findings in the order of the Tribunal.
One of the reasons given by Chagla, C. J., in Madanlal Dharnidharka vs Commissioner of Income tax(1) for differing from the decision in A. Abboy Chetty and Go.
vs Commissioner of Income tax, Madras (2) that it is only a question which was raised before the Tribunal that could be said to arise out of its order was that that view must result in great injustice in a case in which the applicant had raised a question before the Tribunal but it had failed to deal with it owing to mistake or inadvertence.
In such a, case, it was said, the applicant would be deprived, for no fault of his, of a valuable right which the legislature had intended to give him.
But we see no difficulty in holding that in those cases the Tribunal must be deemed to have decided the question against the appellant, as Falshaw, J. was disposed to do in Mash Trading Co. vs Commissioner of Income tax (3).
This is only an application of the principle well known to law that a relief asked for and not granted should be deemed to have been refused.
It is on this footing that Kania, J. held in New Piecegoods Bazar Co. Ltd. vs Commissioner of Income tax (4) that, in the circumstances stated above, the court could call upon (1) , 233, 234.
(3) (2) (4) 813 the Tribunal to state a supplemental case after giving its own decision on the contention.
That was also the procedure adopted in Mohanlal Hiralal vs Commissioner of Income tax(1).
Such cases must be exceptional and cannot be founded on for putting a construction different from what the language of section 66(1) would otherwise warrant.
There was also some argument as to the position under section 66(1) when the Tribunal decides an appeal on a question of law not raised before it.
That would undoubtedly be a question arising out of the order, and not the less so because it Was not argued before it, and this conclusion does not militate against the construction which we have put on the language of section 66(1).
The result of the above discussion may thus be summed up: (1) When a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order.
(2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is therefore one arising out of its order.
(3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order.
(4) When a question of law is neither raised before the Tribunal nor considered by it.
, it will not be, a question arising out of its order notwithstanding that it may arise on the findings given by it.
Stating the position compendiously, it is only a question that has been raised before or decided by the Tribunal that could be held to arise out of its order.
In this view, we have next to consider whether the question which was raised before the High Court was one which arose out of the order of the Tribunal, as interpreted above.
Now the only question on which the parties were at issue before the income tax authorities was whether the sum of Rs. 9,26,532 was assessable to tax as income received during the year of (1) 814 account 1945 46.
That having been decided against the respondents, the Tribunal referred on their application under section 66(1), the question, whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income for the assessment year 194647, and that was the very question which was argued and decided by the High Court.
Thus it cannot be said that the respondents had raised any new question before the court.
But the appellant contends that while before the income tax authorities the respondents disputed their liability on the ground that the amount in question had been received in the year previous to the year of account, the contention urged by them before the court was that even on the footing that the income had been received in the year of account, the proviso to section 10(2)(vii) had no application, and that it was a new question which they were not entitled to raise.
We do not agree with this contention.
Section 66(1) speaks of a question of law that arises out of the order of the Tribunal.
Now a question of law might be a simple one, having its impact at one point, or it may be a complex one, trenching over an area with approaches leading to different points therein.
Such a question might involve more than one aspect, requiring to be tackled from different standpoints.
All that section 66(1) requires is that the question of law which is referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal.
Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal.
It will be an over refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66(1) of the Act.
That was the view taken by this Court in The Commissioner of Income tax, Bombay vs Messrs. Ogale Glass Works Ltd. (1) and in Zoraster & Co. vs Commissioner of Income tax (2), and we agree with it.
As the question on which the parties were at issue, which was referred (1) (2) ; 815 to the court under section 66(1), and decided by it under s.66(5) is whether the sum of Rs. 9,26,532 is liable to be included in the taxable income of the respondents, the ground on which the respondents contested their liability before the High Court was one which was within the scope of the question, and the High Court rightly entertained it.
It is argued for the appellant that this view would have the effect of doing away with limitations which the legislature has advisedly imposed on the right of a litigant to require references under section 66(1), as the question might be framed in such general manner as to admit of new questions not argued being raised.
It is no doubt true that sometimes the questions are framed in such general terms that, construed literally, they might take in questions which were never in issue.
In such cases, the true scope of the reference will have to be ascertained and limited by what appears on the statement of the case.
In this connection, it is necessary to emphasize that, in framing questions, the Tribunal should be precise and indicate the grounds on which the questions of law are raised.
Where, however, the question is sufficiently specific, we are unable to see any ground for holding that only those contentions can be argued in support of it which had been raised before the Tribunal.
In our opinion, it is competent to the court in such a case to allow a new contention to be advanced, provided it is within the framework of the question as referred.
In the present case, the question actually referred was whether the assessment in respect of Rs. 9,26,532 was proper.
Though the point argued before the Income tax authorities was that the income was received not in the year of account but in the previous year, the question as framed is sufficient to cover the question which was actually argued before the court namely that in fact the assessment is not proper by reason of the proviso being inapplicable.
The new contention does not involve re framing of the issues.
On the very terms of the question as referred which are specific, the question is permissible and was open to the respondents.
Indeed the very order of reference 816 shows that the Tribunal was conscious that this point also might bear on the controversy so that it cannot be said to be foreign to the scope of the question as framed.
In the result, we are of opinion that the question of the applicability of the proviso is really implicit, as was held by Chagla, C.J., in the question which was referred, and, therefore, it was one which the court had to answer.
On the merits, the appellant had very little to say.
He sought to contend that the proviso though it came into force on May 5, 1946, was really intended to operate from April 1, 1946, and he referred us to certain other enactments as supporting that inference.
But we are construing the proviso.
In terms, it is not retrospective, and we cannot import into its construction matters which are ad extra legis, and thereby alter its true effect.
Then it was argued that the amount of Rs. 9,26,532 having been allowed as deduction in the previous years, may now be treated as profits received during the year of assessment, and thereby subjected to tax.
But this is a point entirely new and not covered by the question, and on the view taken by us as to the scope of a reference under section 66(1), it must be disallowed.
In the result, this appeal is dismissed with costs.
SHAH, J.
The Income tax Appellate Tribunal, Bombay Bench "A" referred the following question to the High Court of Judicature at Bombay under section 66(1) of the Indian Income tax Act: "Whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income computed for the assessment year 1946 47.
" The question comprehends two component parts, (1) whether the amount of Rs. 9,26,532 was properly included in the assessee 's income, and (2) whether the amount was properly included in the taxable income of the assessees for the assessment year 1946 47.
The amount sought to be taxed was part of compensation received by the assessees from the Government of India for loss in 1944 by enemy action of their ship "El Madina." The assessees maintained before the 817 taxing authorities and the Tribunal that the compensation accrued to them on April 16, 1944.
This plea was rejected, but rejection of that plea was not sufficient to make the amount taxable.
it had still to be decided whether the amount which was received in the months of July and December, 1944, war, taxable as income.
It is common ground that before the amendment by Act 8 of 1946 of section 10, sub section
(2), cl.
(7), by the inclusion of the fourth proviso, compensation received for loss of a capital asset like a ship was not taxable as income under the Indian Income tax Act.
The tribunal observed that the compensation accrued when it was ascertained and was received by the assessees in the year of account and the amount, was therefore rightly brought to tax in the year of assessment 1946 47.
Manifestly, the tribunal its attention to the statutory provision on the application of which the exigibility of the tax depended.
But proviso IV to section 10, sub section
(2), cl.
(7) came into force on May 4, 1946.
It was not in force on April 1, 1946, the day on which the liability to pay tax for the year of assessment 1946 47 crystallized.
The tribunal erroneously assumed that the amending Act was in force at the date of commencement of the year of assessment and the assessees did not attempt to remove that misapprehension.
But the question whether the amount sought to be taxed was properly included did arise out of the order of the tribunal, the tribunal having held that the amount of compensation was taxable by virtue of section 10, sub section
(2), cl.
(7), proviso IV.
The question whether the statutory pro vision relied upon to tax the assessees was applicable to the amount sought to be assessed as income was as much a question arising out of the order of the tribunal as the question whether the interpretation placed by the tribunal upon that proviso was correct, may be.
The assessees had maintained that they were not liable to be taxed under section 10, sub section
(2), el.
(7), proviso IV because the amount sought to be taxed was received before the year of account relevant for the 103 818 assessment year 1946 47.
The tribunal held, negativing the contention, that it was taxable under section 10, sub section
(2), el.
(7), proviso IV.
A question of law whether the amount was properly included in the taxable income for the year of assessment clearly arose and that question was referred by the tribunal to the High Court.
The High Court under section 66, cl.
(5) of the Income tax Act has to record its opinion on the questions arising out of the order of the tribunal and not on the arguments pro and con advanced before the tribunal.
In my view, the High Court had jurisdiction on the question arising out of the order of the tribunal and referred, in deciding that the Act which made the amount taxable was not in operation at the material date.
This would be sufficient to dispose of the appeal but counsel for the revenue submits that as it was never urged before the tribunal by the assessees that the amending Act 8 of 1946 which made the compensation received by the assessees, taxable as income, was brought into operation after the commencement of the year of assessment 1946 47, and the tribunal never directed its attention to that plea, it had no jurisdiction to refer that question to the High Court arid the High Court was not competent to answer that question even if on the facts found the question clearly arose out of the order of the tribunal.
Counsel urges that the question arising out of the order of the tribunal is only that specific question which has been raise(] and argued before the tribunal and on which the tribunal has given its decision.
We have heard elaborate arguments on the true meaning of the expression "any question of law arising out of such order" and the nature of the jurisdiction exercised by the High Court under section 66 of the Income tax Act.
There is wide divergence of opinion oil the true import of this clause.
Before I refer to the authorities, it would be useful to set out the scheme of the Income tax Act relating to reference of questions to the High Court under section 66, and the nature of the jurisdiction which the High Court exercises.
819 "(1) Within sixty days of the date upon which he is served with notice of an order under sub section
(4) of section 33 the assessee or the Commissioner may, by application in the prescribed form require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and the Appellate Tribunal shall draw up a statement of the case and refer it to the High Court: Provided. . (2) If on any application being made under sub section
(1)the Appellate Tribunal refuses to state a case on the ground that no question of law arises, the assessee or the Commissioner as the case may be, may apply to the High Court, 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 a case and to refer it,, and on receipt of any such requisition the Appellate Tribunal shall state the ease and refer it accordingly.
(3). . . (4) If the High Court is not satisfied that the statements in a case referred under this section are sufficient to enable it to determine the question raised thereby, the court may refer the case back to the Appellate Tribunal to make such additions thereto or alterations therein as the court may direct in that behalf.
(5) The High Court upon the hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the ground, on which such.
decision is founded and shall send a copy of such judgment. to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such Judgment.
(6) (7) (7A) (8). . . .
Under the scheme of the Indian Income tax Act, the appellate tribunal is the sole judge of facts.
The High Court indisputably exercises a special advisory 820 jurisdiction to record its opinion on questions submitted, by the tribunal; it does not act as a court of appeal or revision on questions of law or fact.
After the disposal of the appeal by the tribunal under section 33(4) of the Income tax Act, the revenue or the tax payer may call upon the tribunal to state a case on the questions of law arising out of the order.
If the tribunal refuses to state a case, the party aggrieved may move the High Court to call upon the tribunal to state a case and the High Court may so direct if it is not satisfied as to the correctness of the decision of the tribunal refusing to state a case.
The question must be one of law and not, of fact and not merely academic; it must be a concrete problem bearing directly on the rights and obligations of the revenue or of the assessees.
The power of the High Court is to require the tribunal to state a case only if it is satisfied that the view of the tribunal (not on the merits of the order under section 33, el.
(4)) but on the application under section 66(1) is erroneous.
If the tribunal is not called upon to refer a question, the High Court cannot arrogate to itself the power to call upon the tribunal to refer questions which arise out of the findings recorded by the tribunal but which the tribunal was not called upon to refer.
But there is in my judgment no warrant for the view that the question which the tribunal may refer or which the High Court on the refusal of the tribunal may call upon the tribunal to refer, must be a question which was raised and argued before the tribunal at the hearing under section 33(4).
The statute does not specifically impose such a restriction nor is it implied.
To import in the meaning of the expression "any question of law arising out of such order" the concept that the question must have been argued before and dealt with by the tribunal in its judgment deciding the appeal, is to impose a fetter upon the jurisdiction of the High Court not warranted by the plain intendment of the statute.
The source of the question must be the order of the tribunal; but of the question it is not predicated that the tribunal must have been asked to decide it at the hearing of the appeal.
It may very well happen and frequently 821 cases arise in which the question of law arises for the first time out of the order of the tribunal.
The tribunal may wrongly apply the law, may call in aid a statutory provision which has no application, may even misconceive the question to be decided, or ignore a statutory provision which expressly applies to the facts found.
These are only illustrative cases: analogous cases may easily be multiplied.
It would indeed be perpetrating gross injustice in such cases to restrict the assessee or the Commissioner to the questions which have been raised and argued before the tribunal and to refuse to take cognisance of questions which arise out of the order of the tribunal, but which were not argued, because they could not (in the absence of any indication as to what the tribunal was going to decide) be argued.
A concrete question of law having a direct bearing on the rights and obligations of the parties which may be founded on the decision of the tribunal is one which in my judgment arises out of the order of the tribunal even if it is not raised or argued before the tribunal at the hearing of the appeal.
It is the duty of the tribunal to draw up a statement of the case and to frame questions; that duty can only be performed adequately if specific questions relating directly to the dispute between the parties are raised.
If the import of the question is unduly large, the High Court has, and is indeed bound in dealing with it to restrict it to its true content in the light of the findings recorded by the tribunal.
But in dealing with the question, the High Court may not only entertain those aspects of the case which were argued before the tribunal, but all such aspects as have fairly a direct bearing on the dispute.
The jurisdiction of the High Court is by statute not expressly circumscribed to recording its opinion on arguments advanced before the tribunal, and the nature of the jurisdiction exercised by the High Court does not demand that such a limitation should be implied.
The court has jurisdiction to decide questions which arise out of the order of the tribunal, not merely those which were raised and argued before the tribunal.
822 On the meaning of the expression "question of law arising out of such order," judicial opinion in the High Courts is divided, and this court has not expressed any authoritative opinion thereon.
No useful purpose will be served by entering upon an analysis of the decisions of ' the High Courts and there are many on this question.
The decisions fall into two broad divisions.
On the one hand it is ruled that "a question of law can be said to arise out of an order of the Appellate Tribunal within the meaning of section 66(1) of the Indian Income tax Act, only if such order discloses that the question was raised before the tribunal.
A question not raised before the tribunal cannot be said to arise out of its order even if on the facts of the case appearing from the; order the question fairly arises.
" The leading cases in support of this view are A. Abboy Chetty & Co. vs Commissioner of Income tax, Madras (1) and The Commissioner of Excess Profits Tax, West Bengal vs Jeewanlal Ltd., Calcutta (2).
This view has been adopted with some variations in the norms of expression in the following cases: Maharaj Kumar Kamal Singh vs Commissioner of Income tax (3), G. M. Chenna Basappa vs Commissioner of Income tax, Hyderabad (4) and Punjab Distilling Industries Ltd. Commissioner of Income tax, Punjab (5).
On the other hand is the view expressed by Chagla, C. J. in Madanlal Dharnidharka vs Commissioner of Income tax (6) where the learned Chief Justice recorded his conclusion as follows: "I should have stated that a question of law arose out of the order of the Tribunal if such a question was apparent on the order itself or it could be raised on the facts found by the Tribunal and which were stated in the order.
I see no reason to confine the jurisdiction of this Court to such questions of law as have been argued before the Tribunal or are dealt with by the Tribunal.
he section does not say so and there is no reason why we should construe the expression arising out of such order ' in a manner unwarranted by the (1) (3) (5) (2) (4) (6) 823 ordinary grammatical construction of that expression.
" For the reasons already set out, in my view, the interpretation placed by Chagla, C. J. on the expression "arising out of such order" is the correct one.
Appeal dismissed. | By section 66 (1) of the Indian Income tax Act, 1922 "the assessee or the Commissioner may, by application in the prescribed form . require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and the Appellate Tribunal shall . draw up a statement of the case and refer it to 789 the High Court.
" The respondents, who received compensation from the Government as owners of a requisitioned steamship lost in enemy action, were assessed to tax under the fourth proviso to section 1O(2)(Vii) of the Indian Income tax Act, which was inserted into the Act by the Income tax (Amendment) Act, 1946 (VIII Of 1946) that came into force on May 4, 1946.
Before the Tax Authorities the respondents sought to resist the liability on the ground that the income was received not in the year of account but in the previous year but failed.
No question as to the applicability of the said proviso was either raised before the Tribunal or dealt with by it.
The question that was referred to the High Court was as follows: "Whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income computed for the assess ment year 1946 47." In the High Court the respondents contended that the said proviso had no application.
The appellant took a preliminary objection to this contention being raised on the ground that it was not raised and argued before the Tribunal but the High Court overruled the objection and held that the compensation amount was not liable to charge as the proviso in question was not in force on the material date.
Against this decision the Commissioner of Income tax appealed.
The point for determination in the appeal was whether the High Court in answering a reference under section 66 could decide a question not raised or argued before the Tribunal.
Held (per Das, Kapur, Hidayatullah and Venkatarama Aiyar, jj.), that the jurisdiction of the High Court under section 66 of the Indian Income tax Act is purely advisory and therefore different from its ordinary jurisdiction as a Civil Court.
It is of the essence of such a jurisdiction that the High Court can decide only such questions as are referred to it and that implies that the questions must necessarily be those that the Tribunal had occasion to consider.
The words "any question of law arising out of such order" in section 66(1) of the Indian Income tax Act, 1922, do not in the context mean any question of law arising out of the findings in the order of the Tribunal but only such questions as were raised before, or decided by the Tribunal.
The Indian Income tax Act, I 922, is not in Pari materia with the British Statute and in view of the difference between section 66(i) and the corresponding provisions of the British Statute no useful purpose can be served by referring to English decisions for interpreting section 66 of the Indian Act.
Commissioner of Income tax vs Shaw Wallace & Co., (1932) L.R. 59 I.A. 2o6, referred to.
Attorney General vs Avelino Armavo & Co., , considered.
790 The power the High Court has under s: 66(2) Of the Act to direct a reference can make no difference since such power is subject to the same limitations as that of the Tribunal under section 66(i) of the Act.
Commissioner of Income tax, Madras vs Mtt.
section Ar.
Arunachalam Chettiar, (1953] S.C.R. 463, New jehangir Vakil Mills Ltd. vs Commissioner of Income tax, [1960] 1 S.C.R. 249, Kusumben D. Mahadevia vs Commissioner of Income tax, and Zoraster & Co. vs Commissioner of Income tax, ; , referred to.
Madanlal Dharnidharka vs Commissioner of Income tax, , disapproved.
Case law reviewed.
The jurisdiction of the High Court in deciding a reference under section 66(5) is co extensive with the right of the litigant to ask for a reference and the power of the court to make one.
Therefore the High Court has jurisdiction in a reference to decide questions of law arising out of the order of the Tribunal, that is question of law raised and decided by the Tribunal, or question of law raised before the Tribunal but not decided by it or question of law decided by Tribunal, though not raised before it, but not questions not raised or decided by the Tribunal even though it may arise from its findings.
A question of law may have more than one aspect and section 66(1) of the Act does not contemplate that each aspect of a question is by itself a distinct question.
It only requires that the question of law which is referred to the Court must have been in issue before the Tribunal.
It does not further require that the reference should be limited to those aspects of the question which had been argued before the Tribunal.
The Commissioner of Income tax, Bombay South vs M/s. Ogale Glass Works Ltd. [1955] I S.C.R. 185 and Zoraster & Co. vs Commissioner of Income tax; , , approved.
In the instant case, the question referred to the High Court was wide enough to cover the contention raised by the respondent and the High Court was right in holding that the fourth proviso to section 10(2)(Vii) Of the Act, not being retrospective in operation, bad no application.
Per Shah, J. Section 66 of the does not contemplate that the question which tire Tribunal may refer, or which the High Court may call upon the Tribunal to refer, must be one that is raised and argued before the Tribunal at the hearing under section 33(4) Of the Act.
The section does riot specifically impose such a restriction nor is it implied.
To import into the expression "any question of law arising out of such order" any limitation that the question must either have been argued before the Tribunal or dealt with by it, would be not only to impose fetters upon the jurisdiction of the High 791 Court which were plainly not intended by the statute and in certain cases might involve gross injustice to the parties.
Madanlal Dharnidharka vs Commissioner Of Income tax, , approved.
Under section 66(5) Of the Act, the court has to record its opinion on the questions arising out of the order of the Tribunal and not on the arguments advanced before it.
In the instant case the High Court, on the question arising out of the order of the Tribunal and referred to it, had jurisdiction to decide that the proviso which made the amount taxable was not in operation at the material date. |
Appeal No. 1631 of 1967.
Appeal by special leave from the order dated May 11, 1967 of the Allahabad High Court in Civil Misc.
Writ Petition No. 1647 of 1967.
S.V. Gupte 'and D.N. Mukherjee, for the appellant.
M.K. Ramamurthi, Shayamala Pappu and Vineet Kumar for respondent No. 2.
The Judgment of the Court was delivered by Vaidialingam, J.
In this appeal, by special leave, the appellant challenges the order of the Allahabad High Court dated May 676 11, 1967 dismissing Civil Miscellaneous Writ Petition No. 1647 of 1967.
The facts leading up to the filing of the said writ petition by the appellant under article 226 of the Constitution, may be briefly stated.
The appellant is an existing company under the and has its registered office at Calcutta.
The company was and is being managed by Martin Burn Ltd., Secretaries and Treasurers.
The company carries on the business of generation, distribution and supply of electricity within its licensed area in the city of Agra and its environs in the State of Uttar Pradesh On a reference made by the Government of Uttar Pradesh regarding a dispute that had arisen between the electricity undertakings managed by Martin Burn Ltd., of which the appellant was one, and their workmen about the demand of the workmen for supply of uniforms, free of charge, the Chairman, Martin Electricity Supply Company Adjudication Board made an award on February 20, 1947 in and by which certain types of workmen were directed to be supplied with uniforms.
The said award remained operative till April 15, 1950 on which date it was terminated.
Though the award had been terminated, the appellant continued the practice of supplying uniforms to its workmen.
Subsequently, again, a dispute was raised by the employees of the electricity undertakings managed by Martin Burn Ltd., regarding the supply of uniforms to some categories of workers.
The said dispute was referred by the Government of Uttar Pradesh, by order dated March 15, 1951, for adjudication to the State Industrial Tribunal, Uttar Pradesh, Allahabad.
The said Industrial Tribunal passed an award dated November 29, 1952 holding that the same categories of workmen to whom uniforms had to be supplied as per the award dated February 20, 1947 were entitled to be supplied with uniforms.
Though this award remained in operation only for a period of one year, the appellant continued to supply uniforms till 1953 after which year the supply of uniforms was discontinued.
Nevertheless, the appellant again resumed supplying uniforms from May 1961.
On December 31, 1961 twenty three employees of the appellant, including the second respondent herein, filed a joint petition before the Labour Court, Meerut,.
under section 6 1 1(2) of the Uttar Pradesh (hereinafter referred to as the Act) claiming that they were entitled to recover the money equivalent to the cost of uniforms which had not been supplied to them during the period 1954 to 1960.
The said petition was numbered as Case No. 1 of 1962.
According to these employees, the employer had failed to supply them uniforms which they were entitled to get and in consequence of such failure the workmen had been put to expense by purchase of clothes to be used while rendering service in the company.
They claimed that the benefits 677 which they were entitled to get should be computed in terms of money to enable them to recover the cost of uniforms from the appellant.
The appellant filed a written statement on January 27, 1962 disputing the claim of the workmen and denying its ii, ability to either supply uniforms or pay the money value of the On February 22, 1964 the application filed by the workmen was taken up by the Labour Court for heating, but as none appeared on behalf of the workmen who were the applicants when the case was called on for hearing the Labour Court Meerut dismissed the application for non prosecution.
The actual order passed by the Labour Court was as follows: "Case called on for hearing.
No one is present on behalf of the applicant, nor 'any request for adjournment has been received.
The application is dismissed as not having been prosecuted.
No order as to costs.
" On or about January 1, 1965 seven employees of the appellant, including the second respondent herein, filed seven separate applications before the Labour Court, Meerut, again under section 6 H(2) of the Act.
The seven applications had been numbered as Case Nos. 217 to 223 of 1965.
The application filed by the second respondent was Case No. 217 of 1965.
The second respontdent, in particular claimed that he was a mains coyly from April 13, 1950 to September 15, 1959 'and that he was entitled to be supplied uniform by the appellant.
As the uniform had not been so supplied he pleaded that he was entitled to recover a sum of Rs. 390/ as cost of the uniforms which the management should have supplied during those years.
All the applicants, including the second respondent, had also stated in their respective applications that they had moved before the Labour Court a similar application, under section 6 H(2) of the Act, but, unfortunately that had been dismissed for default on February 21, 1964 and hence the fresh applications were being filed.
The appellant flied on or about April 7, 1965 separate objections denying the claim made by the applicants.
We are not, at this stage, concerned with the various pleas taken either by the employees, in support of their claim, or by the appellant, in denial thereof.
It is only necessary to state that the appellant pleaded that the fresh applications, filed by the workmen, were not maintainable in view of the fact that identical applications, claiming the same reliefs, had been dismissed on February 21, 1964 by the Labour Court.
If the workmen were aggrieved by that said order, the proper remedy that should have been adopted by them was by taking action under r. 16(2) of the Uttar Pradesh Industrial Disputes Rules, 1957 (hereinafter referred to as the rules).
Not 678 having adopted the procedure indicated therein, the management pleaded that it was no longer open to the workmen to file a second application and the Labour Court had no jurisdiction to entertain the same.
The Labour Court had, by its order dated August 27, 1965 consolidated all the seven applications.
On the basis of the objection raised by the appellant to the maintainability of the applications filed, issue No. 5 was framed in the following terms: "Whether the present applications of the workmen under section 6 H(2) are not maintainable for the reasons given in para 5 of the written statement of the employers ?" and this issue was treated as a preliminary issue 'and arguments heard on the same By order dated February 10, 1967 the Labour Court held that the applications filed by the seven workmen, including the second respondent were maintainable.
The Labour Court has expressed the view that the order passed on February 21, 1964 was one dismissing the applications, filed by the workmen, for default and such an order was not contemplated by sub r.
(1 ) of r. 16 of the rules, and hence the workmen were not bound to take 'action under sub r.
(2) of r. 16.
In consequence the Labour Court held that the applications filed by the workmen were competent and directed the applications to be posted for further hearing.
Though the order had been passed in Case No. 217 of 1965, the Labour Court directed that the finding given on issue No. 5 would govern Cases Nos. 218 to 223 of 1965 also.
The 'appellant challenged this finding of the Labour Court before the High Court of Allahabad in Civil Writ No. 1647 of 1967.
A Division Bench of the High Court, by its order dated May 11, 1967 summarily dismissed the writ petition.
Mr. Gupte, learned counsel for the appellant and Mr. Ramamurthy, learned counsel for the second respondent, urged the same contentions that were urged on behalf of their clients before the Labour Court.
Therefore the question that arises for consideration is whether the view of the Labour Court that the second application filed by the second respondent herein is maintainable, is correct.
Section 6 H of the Act deals with recovery of money due from an employer.
Section 6 H more or less corresponds to section 33 C of the .
Sub section
(2) of section 6 H, with which we are concerned, is as ,follows: "(2) Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to any rules 679 that may be made under this Act, be determined by such Labour Court as may be specified in this behalf by the State Government, and the amount so determined may be recovered as provided for in sub section (1 ).
" As we have already mentioned, the second respondent, along with certain others, had filed an application on December 31, 1961 claiming identical relief that is now claimed in Case No. 217 of 1965.
That application was dismissed as not having been prosecuted, on February 22, 1964.
The second application was filed on January 1, 1965.
We shall now refer to the relevant rules.
Rule 9 empowers a Tribunal or Labour Court to accept, admit or call for evidence at any stage of the proceedings before it and in such manner as it may think fit Rule 10 relates to the issue of summons for production of any books, papers or other documents as the Labour Court, Tribunal or Arbitrator feels necessary for the purpose of investigation or adjudication.
Rule 12 relates to procedure at the first hearing.
It states that 'at the first sitting of a Labour Court or Tribunal, the Presiding Officer shall call upon the parties in such order as he may think fit to state their case.
Rule 16 provides for the Labour Court or Tribunal or Arbitrator proceeding ex parte, as follows: "( 1 ) If, on the date fixed or on ,any other date to which the hearing may be adjourned, any party to the proceedings before the Labour Court or Tribunal or an Arbitrator is absent, though duly served with summons or having the notice of the date of hearing, the Labour Court or Tribunal or the Arbitrator, as the case may be, may proceed with the case in his absence and such order as it may deem fit and proper.
(2) The Labour Court, Tribunal or an Arbitrator may set aside the order passed against the party in his absence, if within ten days of such order, the party applies in writing for setting aside such order and shows sufficient cause for his absence.
The Labour Court, Tribunal or an Arbitrator may require the party to file an affidavit, stating the cause of his absence.
As many copies of the application and affidavit, if any, shall be filed by the party concerned as there are persons on the opposite side.
Notice of the application shall be given to the opposite parties before setting aside the order.
" Sub rule (1 ) deals with the absence of a party on the date fixed, or on any other date to which the hearing may be adjourned, though he has been served with summons or he has notice of the date of hearing.
Under the circumstances it provides that the 680 Labour Court, Tribunal or Arbitrator, as the case may be "may proceed with the case in his absence and pass such order as it may deem fit and proper".
It is to the setting aside of such an order that may have been passed under sub r. (1 ), that the procedure is indicated in sub r.
According to Mr. Gupte, learned counsel for the appellant, the order passed on February 22, 1964, by the Labour Court is one contemplated by sub r.
(1) of r. 16, in which case the provisions of sub r.
(2) are attracted and the second respondent, if he felt aggrieved by that order, should have filed an application under sub r.
(2), within time, to set aside that order.
We are not inclined to 'accept this contention of Mr. Gupte.
As pointed out earlier by us, the order passed on February 22, 1964, is one dismissing the application as not having been prosecuted, for default of appearance of the second respondent.
We will presently show that the order of February 22, 1964 cannot be considered to be one contemplated to have been passed under sub r.
( 1 ) of r. 16.
Sub r.
( 1 ) refers to a party being absent on the date fixed, or on any other date to which the hearing has been adjourned, and such party having been duly served or having notice of the date of hearing.
The said sub r.
(1 ) indicates as to what is to be done .under such circumstances.
We have referred to r. 12 which provides for what the Labour Court or Tribunal should do at the first hearing.
Neither the Act nor the rules empower a Tribunal or Labour Court to dismiss an application for default of appearance of a party.
Rule 16 (1 ) is the only provision for what is to be done when a party is absent.
That provision, which clearly enjoins the Labour Court or Tribunal in the circumstances mentioned therein "to proceed with the case in his absence" either on the date fixed or on any other date to which the hearing may be adjourned, coupled with the further direction "and pass such order as it may deem fit and proper", clearly indicates that the Tribunal or Labour Court should take up the case and decide it on merits 'and not dismiss it for default.
Without attempting to be exhaustive, we shall just give an example.
Where a workman, after leading some evidence in support of his claim, absents himself on the next adjourned date with the result that he does not lead further evidence, the Tribunal is bound to proceed with the case on such evidence as has been placed before it.
It cannot dismiss the application on the ground of default of appearance of the workman.
This will be an instance of "proceeding with the case in the absence of a party" and giving a decision on merits.
If such an order is passed by the Tribunal in the absence of one or other of the parties before it, a right is given to such party to apply under sub r.
(2) for setting aside the order that has been passed in his absence in the case in terms of sub r.
The application must be filed within the period mentioned in 681 sub r.
(2) and the party will have also to satisfy the Tribunal or Labour Court that he had sufficient cause for his absence.
The necessity for filing an application for setting aside an order passed in the case in the absence of 'a party, as contemplated under sub r.
(2) of r. 16 will only arise when an order on merits affecting the case has been passed in the absence of a party, under sub r.
(1 ) of r. 16.
An order dismissing a case for default or non prosecution, does not come under sub r.
( 1 ) of r. 16 and to such an order sub r.
(2) has no 'application.
We have already indicated that the order passed on February 22, 1964 by the Labour Court cannot be considered to be an order contemplated under sub r.
(1 ) of r. 16.
If that is so, the second respondent was not bound to file an application within the time mentioned in sub r.
(2) for setting 'aside the order dated February 22, 1964.
Therefore the fact that a previous application, filed by the second respondent, was dismissed for non prosecution on February 22, 1964 is no bar under r. 16(2) to the filing of the present application, Case No. 217 of 1965.
It follows that the objections raised by the appellant to the maintainability of the application filed by the second respondent have been rightly rejected by the Labour Court and the High Court.
The appeal fails and is dismissed.
The appellant will pay the costs of the second respondent. | The second respondent originally filed an application for certain reliefs against its employer (the appellant company).
The Labour Court dismissed the application as not having been prosecuted for the default of the appearance of the applicants.
The second respondent filed a second application claiming the same reliefs.
The management objected to the maintainability of the second application contending that if the workmen were aggrieved by the earlier order, the proper remedy that should have been adopted by them was by taking action under r. 16(2) of the Uttar Pradesh Industrial Disputes, Rules, 1957.
The Labour Court rejected the objection, and the appellant challenged the decision in a writ petition to the High Court.
The High Court dismissed the writ petition.
HELD: An order dismissing a case for default or non prosecution, does not come under sub r.
(1) of r. 16 and to such an order sub r.
(2) has no application.
Neither the Act nor the rules empower a Tribunal or Labour Court to dismiss an application for default of appearance of a party.
Rule 16(1) is the only provision providing for what is to be done when a party is absent.
That provision, which clearly enjoins the Labour Court or Tribunal in the circumstances mentioned therein "to proceed with the case in his absence", either on the date fixed or on any other date to which the hearing may be adjourned, coupled with the further direction "and pass such order as it may deem fit and proper", indicates that the Tribunal or Labour Court should take up the case and decide it on merits and not dismiss it for default.
The necessity for filing an application for setting aside an order passed in the case in the absence off a party, as contemplated under sub r.
(2) of r. 16 will arise only when .an order on merits affecting the case has been passed in the absence of a party, under sub r.
( 1 ) of r. 16.
[680 E; 681 A B] |
: Criminal Appeal No. 18 of 1953.
Appeal under article 134(1)(c) of the Constitution of India from the Judgment and Order dated the 18th February, 1953, of the High Court of Judicature at Bombay in Criminal Appeal No. 592 of 1952 arising out of the Judgment and Order dated the 21st May, 1952, of the Court of the Presidency Magistrate, 19th Court, Bombay, in Case No. 147/P/ 1951.
B. H. Lulla and Rajinder Narain for the appellants.
Porus A. Mehta for the respondent.
May 13.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J.
The appellants were charged under section 18(1) of the Bombay Rent I Restriction Act, 1947, for receiving from Shankar Das Gupta through Mathra Das, accused No. 3, on 23rd November, 1950, a sum of Rs. 2,400 as premium or 160 pugree in respect of the grant of lease of Block No. 15 in a building under construction.
The magistrate found 'the appellants guilty of the charge and sentenced each of them to two months ' R.I. and a fine of Rs. 1,200.
Mathra Das was convicted and sentenced to one day 's S.I. and a fine of Rs. 100.
The fourth accused, Roshanlal Kanjilal, was acquitted.
Mathra Das preferred no appeal against his conviction and sentence.
The appellants preferred an appeal to the High Court against their conviction.
This was heard by Gajendragadkar and Chainani JJ.
on the 8th of October, 1952.
It was contended, inter alia, that even if it were held that the appellants had accepted the sum of Rs. 2,400 they could not be said to have committed an offence under section 18(1) of the Act inasmuch as the amount could not in law be held to be a premium in respect of the grant of a lease.
On this point the learned Judged said as follows : " In the present case the work regarding the building which still remained to be done was so important that both the parties agreed that the complainant should get into possession after the said work was completed.
In such a case unless the building is completed the tenant has no right which can be enforced in a Court of law.
If the landlord finds it impossible for any reason to complete the building, what is the right which an intending tenant can enforce against him.
Therefore, in our opinion, there is considerable force in the contention urged by Mr. Lulla that in the present case even if it be held that the accused had received Rs. 2,400 in the circumstances to which we have already referred that would not bring them within the mischief of section 18(1) because there has been no grant of a lease at all.
There is only an agreement that the landlord would lease to the complainant a particular flat after the building has been fully and properly completed.
It does appear that section 18 1 does not bring within its mischief executory agreements of this kind." A contrary view had been expressed in Criminal Revision No. 1178 of 1949, by another Bench of the High Court on the construction of section 18(1).
The 161 matter was therefore referred to the Full Bench.
The question framed for the consideration of the Full Bench was in these terms: If as owners of an in complete building the appellants accepted Rs. 2,400 from the complainant in respect of an agreement between them that the appellants were bound to give and the complainant was entitled to take possession of flat No. 15 in the said building as soon as the said building was completed on the agreed rent of Rs. 75 per month, did the acceptance of Rs. 2,400 by the appellants fall within the mischief of section 18 of Bombay Act LVII of 1947 This question, if answered in the negative by the Full Bench, would have concluded the case.
The Full Bench answered the question referred in the affirmative.
It held that the oral agreement did not constitute a lease but it amounted to an agreement to grant a lease in future, and that the receipt of consideration for an executory agreement was within the mischief of section 18(1) of the Act.
The Full Bench Expressed its opinion in these terms: " What the Legislature has penalized is the receipt of a premium by the landlord and the Legislature has also required a nexus between the receipt by the landlord of a premium and the grant of a lease of any premises.
Therefore a receipt alone by a landlord would not constitute an offence, but that receipt must be connected with the grant of the lease of any premises.
Unless that connection is established no offence would be committed.
The contention of Mr. Lulla on behalf of the accused is that the receipt of the premium must be simultaneous with the grant of the lease.
If the lease comes into existence at a future date, then the receipt of a premium according to him is not "in respect of " the grant of a lease.
Therefore the key words according to us in this section are " in respect of.
" It is relevant to observe that the Legislature has advisedly not used the expression "for" or "in consideration of" or " as a condition of " the grant of a lease.
It has used an expression which has the widest connotation and 21 162 means in its plain meaning " connected with or attributable to," and therefore it is not necessary that there must be simultaneous receipt by the landlord with the grant of the lease.
So long as so 'me connection is established between the grant of the lease and the receipt of the premium by the landlord, the provisions of the section would be satisfied.
In our opinion it is impossible to contend that in the present case there was no connection whatever between the landlord receiving the premium and his granting the lease of the premises.
It is true that when he received the premium he did not grant a lease.
It is true that all that he did when he received the premium was to enter into a contract with his tenant to grant a lease in future.
But the object of the landlord in receiving the premium and the object of the tenant in paying the premium was undoubtedly on the part of the landlord the letting of the premises and oh the part of the tenant the securing of the premises.
Therefore the object of both the landlord and the tenant was the grant of the lease of the premises concerned and that object was achieved partly and to start with by an oral agreement being arrived at between the landlord and the tenant with regard to the granting of this lease, the lease being completed when delivery of possession of the premises would be given.
Therefore, in our opinion, on the facts of this case it is not possible to contend that the payment of the premium received by the landlord was unconnected with the grant of a lease of any premises.
The fact that no grant was made at the time when the premium was received, the fact that there was merely an agreement to grant a lease, the fact that the lease would come into existence only at a future date, are irrelevant facts so long as the connection between the receiving of the premium and the granting of the lease is established.
" On return from the Full Bench, the Division Bench considered the other contentions raised on behalf of the appellants and held that there were no merits in any one of those points and in the result the appeal was dismissed.
It was certified that the case involved a substantial question of law and was a fit one for appeal to this Court.
This appeal is before us on that certificate, 163 The principal question to decide in the appeal is whether the answer given by the Full Bench to the question referred to it is right, and whether receipt of a sum of money by a person who enters into an executory contract to grant a lease of a building under construction falls within the mischief of section 18(1) of the Act Section 18(1) provides: " If any landlord either himself or through any person acting or purporting to act on his behalf receives any fine, premium or other like sum or deposit or any consideration, other than the standard rent. " in respect of the grant, renewal or continuance of a lease of any premises such landlord or person shall be punished " in the manner indicated by the section Under the section the money must be received by the landlord in respect of the grant of a lease.
The section refers to the " grant, renewal or continuance of a lease.
" Prima facie, it would not cover an executory agreement to grant a lease.
The words " renewal or continuance of a lease " clearly suggest that there must be a renewal or continuance of a subsisting lease.
In the context, grant of tenancy means the grant of new or initial tenancy; renewal of tenancy means the grant of tenancy after its termination; and continuance seems to contemplate continuance of a tenancy which is existing.
Whether or not an executory agreement for grant of a lease comes within the ambit of the section by reason of the use of the words " in respect of " would be examined hereinafter.
Before doing so it may be stated that an instrument is usually construed as a lease if it contains words of present demise.
It is construed as an executory agreement, notwithstanding that it contains words of present demise, where certain things have to be done by the lessor before the lease is granted, such as the completion or repair or improvement of the premises, or by the lessee, such as the obtaining of sureties.
(Vide Halsbury 's Laws of England, Second Edition, Vol. 20, pp. 37 39).
On the facts of this case therefore the Full Bench very rightly held that the 164 oral, agreement made between the parties did not constitute a lease but it amounted to an agreement to grant a lease in future.
It may further be pointed out that, in fact, in this case the lease never came into existence.
Moreover, in view of the provisions contained in the Bombay Land Requisition Act XXXIII of 1948, as amended, the appellants could not let out the building even after its completion unless on a proper notice being given the Controller of Accommodation did not exercise his powers under that Act.
It so happened that as soon as the building was completed the Controller of Accom modation requisitioned it, and thus no occasion arose for giving effect to the executory contract.
The question that needs our determination in such a situation is Whether section 18(1) makes punishable receipt of money at a moment of time when the lease had not come into existence, and when there was a possibility that the contemplated lease might never come into existence.
It may be here observed that the provisions of section 18(1) are penal in nature and it is a well settled rule of construction of penal statutes that if two possible and reasonable constructions can be put upon a penal provision, the Court must lean towards that construction which exempts the subject from penalty rather than the one which imposes penalty.
It if; not competent to the Court to stretch the meaning of an expression used by the Legislature in order to carry out the intention of the Legislature.
As pointed out by Lord Macmillan in London and North Eastern Railway Co. vs Berriman(1), " where penalties for infringement are imposed it is not legitimate to stretch the language of a rule, however beneficent its intention, beyond the fair and ordinary meaning of its language.
" The High Court took the view that without stretching the language of section 18(1) beyond its fair and ordinary meaning, the very comprehensive expression " in respect of " used by the Legislature could lead to only one conclusion, that the Legislature wanted the (1) , 295, 165 penal consequences of section 18(1) to apply to any nexus between the receipt by a landlord of a premium and the grant of the lease.
In our judgment, the High Court laid undue emphasis on the words "in respect of" in the context of the section.
Giving the words " in respect of " their widest meaning, viz., " relating to " or " with reference to", it is plain that this relationship must be predicated of the grant, renewal or continuance of a lease, and unless a lease comes into existence simultaneously or near about the time that the money is received, it cannot be said that the receipt was " in respect of " the grant of a lease.
The relationship of landlord and tenant does not come into existence till a, lease comes into existence; in other words, there is no relationship of landlord and tenant until there is a, demise of the property which is capable of being taken possession of If the Legislature intended to make receipts of money on executory agreements punishable, the section would have read as follows: " receives any fine, premium or other like sum or deposit or any consideration other than the standard rent in respect of the lease or an agreement of lease of the premises, such landlord or person shall be punished " in the manner indicated in the section.
The section does not make the intention punishable; it makes an act punishable which act is related to the existence of a lease.
It does not make receipt of money on an executory contract punishable; on the other hand it only makes receipt of money on the grant, renewal or continuance of the lease of any premises punishable and unless the lease come into existence no offence can be said to have been committed by the person receiving the money.
It is difficult to hold that any relationship of 'landlord and tenant comes into existence on the execution of at agreement executory in nature or that the expression " premium " can be appositely used in connection with the receipt of money on the occasion of the executor of such an agreement, It may well be that if a leas( actually comes into existence then any receipt of money which has a nexus with that lease may fall within the mischief of section 18(1), but it is unnecessary to ex press any final opinion on the question as in the present 166 case admittedly no lease ever came into existence and the relationship of landlord and tenant was never created between the parties.
The landlord never became entitled to receive the rent from the tenant and the tenant never became liable to pay the rent.
There was no transfer of interest in the premises from the landlord to the tenant.
On its plain, natural, grammatic meaning, the language of the section does not warrant the construction placed upon it by the Full Bench merely by laying emphasis on the words " in respect of.
" In our opinion the language of the section ; 'in respect of the grant, renewal or continuance of a lease " envisages the existence of a lease and the payment of an amount in respect of that lease or with reference to that lease.
Without the existence of a lease there can be no reference to it.
If the Legislature intended to punish persons receiving pugree on merely executory contracts it should have made its intention clear by use of clear and unambiguous language.
The construction we are placing on the section is borne out by the circumstance that it occurs in Part I of the Act.
Section 6 of this Part provides that " in areas specified in Schedule I, this Part shall apply to premises let for residence, education, business, trade or storage.
" This Part relates to premises let, in other words, premises demised or given on lease and not to premises that are promised to be given on lease and of which the lease may or may not come into being.
The definition of the expression " landlord" also suggests the same construction.
Landlord " as defined in section 5 of the Act means any person who is for the time being receiving, or entitled to receive, rent in respect of any premises whether on his own account or on account, or on behalf, or for the benefit, of any other person, or as a trustee, guardian or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant. .
It is obvious that on the basis of an executory agreement the appellants would not be entitled to receive any rent.
They would only be entitled to receive rent after the lease is executed and actual 167 demise of the premises or their transfer is made in favour of the complainant.
The definition of the expression tenant" also suggests the same construction.
Mr. Mehta for the State, besides supporting the emphasis placed by the High Court on the words " in respect of," contended that that construction could be supported in view of the provisions of sub section (3) of section 18 which is in these terms: " 18(3) Nothing in this section shall apply to any payment made under any agreement entered into before the first day of September, 1940, or to any payment made by any person to a landlord by way of a loan, for the purpose of financing the erection of the whole or part of a residential building or a residential section of a building on the land held by him as an owner, a lessee or in any other capacity, entitling him to build on such land, under an agreement which shall be in writing and shall, notwithstanding anything contained in the Indian , be registered.
Such agreement shall inter alia include the following conditions, namely, (1) that the landlord is, to let to 'such person the whole or part of the building when completed for the use of such person or any member of his family. .
It was suggested that but for this exception the executory agreement would be included within the mischief of section 18(1) and that unless such agreements were within the mischief of the section there would have been no point in exempting them from its provisions.
In our view, this contention is not sound.
In the first place, the exception was added to the section by Act 42 of 1951, subsequent to the agreement in question, and for the purposes of this case section 18(1) should ordinarily be read as it stood in the Act, at the time the offence is alleged to have been commit ted.
Be that as it may, it appears that sub section (3) was added to the section by reason of the fact that some Courts construed section 18(1) in the manner in which it has been construed by the Full Bench in this case, and the Legislature by enacting clause (3) made it clear that agreements of the nature indicated in the 168 subjection were never intended to be included therein.
In our opinion, the language of that section is not of much assistance in construing the main provisions of section 18(1).
The result therefore is that in our view the receipt of money by the appellants from the complainant at the time of the oral executory agreement of lease was not made punishable under section 18(1) of the Act and is outside its mischief, and the Presidency Magistrate was in error in convicting the appellants and the High Court was also in error in upholding their conviction.
We accordingly allow this appeal, set aside the conviction of the appellants and order that they be acquitted.
Appeal allowed. | Section 18(1) of the Bombay Rents,. ,. .
Control Act 1947 provides; " If any landlord either himself or through any person acting or Purporting to act on his behalf. . receives any fine, premium or other like sum or deposit or any consideration, other than 159 the standard rent in respect of the grant, renewal or continuance of a lease of any premises such landlord or in the manner indicated by the section.
Held, that the words " renewal or continuance of a lease clearly suggest that there must be a renewal or continuance of a subsisting lease.
They would not cover an executory contract to grant a lease.
Giving the words " in respect of " their widest meaning, viz., relating to " or " with reference to " it is plain that this relationship must be predicated of the grant, renewal or continuance of a lease and unless a lease comes into existence simultaneously or near about the time that the money is received it cannot be said that the receipt was " in respect of " the grant of a lease.
The relationship of landlord and tenant does not come into existence till a lease comes into existence, in other words, there is no relationship of landlord and tenant until there is a demise of the property which is capable of being taken possession of.
The section does not make the intention punishable, it makes an act punishable which is related to the existence of a lease.
It does not make receipt of money on an executory contract punishable.
London and North EasterN Railway Co. vs Berriman (1946 A.C.278, 295) referred to. |
iminal Appeal No. 49 of 1967.
Appeal from the judgment and order dated August 14, 1964 of the Bombay High Court, Nagpur Bench in Misc.
Civil Application No. 13 of 1963.
Mohan Behari Lal, for the appellants.
V.K. Sanghi and Ganpat Rai, for respondents Nos. 1 and 2.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought by certificate from the judgment of the Bombay High Court Nagpur Bench dated August 14, 1964 by which the appellants were convicted for contempt of Court of Civil Judge, Junior Division, Nagpur and sentenced to pay a fine of Rs. 200/ each.
By the same judgment respondent No. 3, Sri Ram Nath Vig was also convicted for contempt and sentenced to pay a fine of Rs. 100/ .
It appears that a hire purchase agreement was entered into between the appellants and respondent No. 1 on or about August 12, 1959.
Under that agreement a motor truck was made available to respondent No. 1 for doing transport business.
The hire purchase agreement contained an arbitration clause for settlement of disputes arising between the parties.
It appears that subsequently disputes did arise between the parties and a reference was made to an arbitrator to settle the disputes.
Resportdent No. 3, Sri Ram Nath Vig who is a practicing lawyer in Delhi was the person named as arbitrator in the arbitration agreement itself and the dispute was submitted to him on or about June 25, 1962 at the instance of the appellants.
Thereafter the arbitrator gave notice of the reference and invited statements of the parties.
He fixed the hearing of the arbitration matter before him on July 17, 1962.
The case of respondent No. 1 is that he did not receive notice of this date from the arbitrator and 4Sup.
C.I./69 10 670 therefore he did not appear on the date fixed.
The arbitrator adjourned the hearing of the reference to another date, namely, August 29, 1962.
The contention of respondent No. 1 is that he was not given intimation of this date also but this point is controverted by the respondents.
Respondents nos.
1 and 2 filed a Civil Suit in the Court of Civil Judge, Senior Division, Nagpur on August 30, 1962.
In this suit they claimed a declaration that the hire purchase agreement was brought about by fraud and was not binding on them on various grounds.
The suit was registered and the court ordered summons to be issued to the two appellants.
Meanwhile, the arbitrator postponed the hearing of the reference to September 15, 1962 and it is alleged that he issued fresh notices to the parties on September 1, 1962.
The hearing was again adjourned to October 23, 1962 and it is said that resportdent No. 3 made an award on October 24, 1962.
It has been found by the High Court that on October 18, 1962 a notice was issued by respondent No. 1 to the appellants and the arbitrator with 'a copy of the plaint.
This notice was received by the appellants on October 22, 1962.
In spite of this notice, evidence was recorded by the arbitrator on October 23, 1962 and he made the award on the next day directing respondent No. 1 to pay Rs. 20,400/ .
The allegation of the arbitrator is that he received the notice sent on October 18, 1962 on the next day of the award i.e., on October 25, 1962.
It appears that in the civil suit filed by respondents 1 and 2 which was registered as Civil Suit No. 657 of 1962 on the file of the Civil Judge, Junior Division, the first date of hearing was fixed, on October 15, 1962.
On that date the appellants filed an application under section 34 of the Arbitration Act for staying the proceedings before the court.
No progress was made in the suit which was adjourned to November 6, 1962 and again to November 28, 1962 at the instance of the appellants.
Finally on November 28, 1962 the arbitrator informed respondent No. 1 that he had made the award.
On these facts respondents 1 and 2 filed an application under section 3 of the Contempt of Court 's Act for action being taken ,against the two appellants, respondent No. 3 and one more person.
According to respondents 1 and 2 the appellants and respondent No. 3 had committed contempt of court in proceeding with the arbitration reference in spite of notice under section 35 of the Arbitration Act being given and in spite of the knowledge of the suit which was filed by respondents 1 and 2.
The application was contested by the 'appellants as well as the arbitrator.
The case of the appellants was that the suit itself was not sustainable and they were unaware that participation in the arbitration proceedings after receipt of notice was precluded by law and that they honestly and bona fide believed that they were not expected to take any action after the receipt of the notice without direction from the arbitrator.
It was for the arbitrator to take a decision in the matter and 'if the arbitrator decided to pro 671 ceed with the arbitration, they only obeyed the orders of the arbitrator and therefore had not committed any contempt.
The defence of respondent No. 3 was that in completing the arbitration and giving his award he was only performing his duty.
He denied that it was necessary for him to await the result of the stay application alleged to have been made by respondent No. 1 in the Nagpur Court as he was of the view that the subject matter in the Nagput Court was not the whole subject matter under arbitration, Respondent No. 3 denied that he had any bias or that he conducted the arbitration proceedings in order to defeat the object of the suit and to place an impediment in the conduct of the suit.
The High Court rejected the contention of the appellants and of respondent No. 3 and held that the action of the appellants in participating in the arbitration proceedings and the conduct of respondent No. 3 constituted contempt of court as the conduct of respondent No. 3 and of the appellants had a tendency to bring into contempt the proceedings before the Civil Court.
It is necessary at this stage to set out the relevant provisions of the Arbitration Act (X of 1940).
Sections 32, 33, 34 and 35 are to the following effect: "32.
Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act." "33.
Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence, also, and it may pass such orders for discovery and particulars as it may do in a suit." "34.
Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are 672 pending to stay the proceedings, and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceeding." "35.
(1 ) No reference nor award shall be rendered invalid by reason only of commencement of legal proceedings upon the subject matter of the reference, but when legal proceedings upon the whole of the subjectmatter of the reference have been commenced between 'all the parties to the reference and a notice thereof has been given to the arbitrators or umpire all further proceedings, in a pending reference shall, unless a stay of proceedings is granted under section 34, be invalid.
(2) In this section the expression 'parties to the reference ' includes any persons claiming under any of the parties and litigating under the same title.
" In our opinion, the High Court was in error in holding that in the circumstances of this case the appellants and respondent No. 3 were guilty of contempt of court.
It is not disputed that there was an arbitration clause in the agreement between the appellants and respondent No. 1 and in terms of the arbitration clause respondents 1 and 2 had a fight to refer the dispute to the arbitrator.
It is also not disputed that a reference to the arbitrator was made by respondents 1 and 2 long before the institution of the civil suit.
It is also apparent that in view of the admitted existence of the hire purchase agreement containing an arbitration clause the remedy of respondent No. 1 was to move the Civil Court under section 33 of the Arbitration Act challenging the existence or validity of the ,arbitration agreement and to have its effect determined.
It was contended on behalf of the appellants that a separate suit was barred under section 32 of the Arbitration Act.
We do not wish to express any opinion on this point in the present case.
Even on the assumption that the suit filed by respondents nos.
1 and 2 in the Nagpur Court is competent, the question arises whether the arbitrator was bound to stay the proceedings beforehim after he got notice from respondents 1 and 2 of 'the institution of the civil suit.
Section 35 of the Arbitration Act does not expressly prohibit the arbitrator from continuing the hearing of the reference but the only effect of section 35 is that "all further proceedings in a pending reference shall, unless a stay of proceedings is granted under section 34, be invalid".
For this consequence to follow, however, two important and distinct conditions must be satisfied, namely, (1) that such legal proceedings must be upon 673 the whole and not merely part of the subject matter of the reference, and (2) that a notice of such a legal proceeding must be given to the arbitrator.
We do not wish to express any opinion as to whether these conditions were satisfied in this case.
But even on the assumption that these conditions were satisfied the only effect is that the further proceedings before the arbitrator after the receipt of the notice are rendered invalid and there is no prohibition under section 35 requiring the arbitrator not to carry on the arbitration proceedings after the receipt of the notice.
It is well established that an 'authority holding an inquiry in good faith in exercise of the powers vested in it by a statute is not guilty of contempt of court, merely because a parallel inquiry is imminent or pending before a court To constitute the offence of contempt of court, there must be involved some 'act done or writing published calculated to bring a court or a judge of the court into contempt or to lower his authority ' or 'something calculated to obstruct or interfere with the due course of justice or the lawful process of the court (See Reg.
vs Gray(1) and Arthur Reginald Perera vs The King(2).
In Tukaram Gaokar vs S.N. Shukla(3), it was held by this Court that the initiation and continuance of proceedings for imposition of penalty on the appellant for his alleged complicity in the smuggling of gold under section 112(b) of the Sea did not amount to contempt of court though his trial in a criminal court for offences under section 135(b) of that Act and other similar offences was imminent 'and identical issues would arise in the proceedings before the customs authorities and in the trial before the criminal court.
In Rizwan ul Hasan vs The State of Uttar Pradesh(4) this Court stated: "As observed by Rankin, C.J. in Anantalal Singha vs Abred Henry Watson [(1931) at 895], the jurisdiction in contempt is not to be invoked unless there is real prejudice which can be regarded as a substantial interference with the due course of justice and that the purpose of the court 's action is a practical purpose and it is reasonably dear on the authorities that the court will not exercise its jurisdiction upon a mere question of propriety." It follows therefore that even if the action of the appellants and respondent No. 1 in this case is assumed to be improper it will not justify the finding that they were guilty of contempt of court when their action was in no way calculated to obstruct the course of justice or to prejudice the trial of the Civil suit.
(1) [1900] 20.B. 36.
(2) (3) ; (4) ; ,588, 674 For these reasons we hold that this ,appeal should be allowed and the judgment of ' the High Court of Bombay, Nagpur Bench dated August 14, 1964 should be set aside and the conviction and sentences imposed on the appellants should be quashed.
The arbitrator, respondent No. 3 has not flied an appeal but in view of our finding with regard to the appellants it is necessary that the conviction of respondent No. 3 and the sentence imposed upon him should also be quashed.
The fines, if already paid by respontdent No. 3 and the ,appellants should be refunded. | A hire purchase agreement was entered into between the appellants and respondent No. 1 Under that agreement a motor transport truck was made available to respondent No. 1 for doing transport business.
The agreement contained an arbitration clause for settlement of disputes When disputes arose reference was made to an arbitrator.
Respondent No. 3 a praetising lawyer was named as the arbitrator.
During the pendency of the arbitration proceedings respondents Nos. 1 and 2 filed a civil suit in which they claimed a declaration that the hire purchase agreement was brought about by fraud and was not binding on them on various grounds.
The suit was registered and the court ordered summons to be issued to the two appellants.
A notice was also issued by respondent No. 1 to the appellants and the arbitrator with a copy of the plaint.
When the arbitrator made an award after recording the evidence of the appellants respondents Nos. 1 and 2 filed an application under section 3 of the Contempt of Courts Act on the allegation on that the appellants and respondent No. 3 had committed contempt of court in proceeding with the arbitration reference in spite of the notice under section 35 of the Arbitration Act being given and in spite of the knowledge of the suit which was filed by respondents 1 and 2.
The application was contested by the appellants as well as the arbitrator.
The appellants contended that in obeying the orders of the arbitrator to produce evidence they did not commit any contempt.
Respondent No. 3 denied that he conducted the arbitration proceedings in order to defeat the object of the suit.
The High Court found the appellants and respondent No. 3 guilty of contempt of court on the view that their conduct had a tendency to bring into contempt the proceedings before the Civil Court.
In appeal to this Court by certificate, HELD: The High Court was in error in holding that in the circumstances of the case the appellants and respondent No. 3 were guilty of contempt of court.
Section 35 of the Arbitration Act does not expressly prohibit the arbitrator from continuing the hearing of the reference.
Its only effect is that "all further proceedings in a pending reference shall, unless a stay of proceedings is granted under section 34, be invalid".
For this consequence to follow, however.
two important and distinct conditions must be satisfied, namely, (1) that such legal proceedings must be upon the whole and not merely part of the subject matter of the reference and (2) that a notice of such legal proceeding must be given to the arbitrator.
Even on the assumption that these conditions were satisfied the only effect is that the further proceedings before the arbitrator after the receipt of the notice are rendered invalid and there is no prohibition under section 35 requiring the arbitrator not to carry on the arbitration proceedings after the receipt of the notice.
[672 G 673 B] 669 It is well established that an authority holding an enquiry in good faith in exercise of the powers vested in it by a statute is not guilty of contempt of court, merely because a parallel enquiry is imminent or pending before a court.
To constitute the offence of contempt of court there must be involved some 'act done or writing published calculated to bring a court or a judge of the court into contempt or to lower his authority ' or 'something calculated to obstruct or interfere with the due course of justice or the lawful process of the court '.
[673 C] Reg.
vs Gray , Arthur Reginald Perera vs The King, , Tukaram Gaokar vs S.N. Shukla, ; and Rizwan ul Hasan vs State of Uttar Pradesh, ; , 588, applied.
It followed therefore that even if the action of the appellants and respondent No. 1 in the present case was assumed to be improper it would not justify the finding that they were guilty of contempt of court when their action was in no way calculated to obstruct the course of justice or to prejudice the trial of the civil suit. |
Appeal No. 1464 of 1968.
Appeal ,from the judgment and order dated March 18, 1968 of the Patna High Court in C.W.J.C. No. 816 of 1967.
A. K. Sen, Bhola Sen, D. Parkar Gupta, Om Khetan, B.P. Maheshwari and R.K. Maheshwari, for the appellant.
M.C. Chagla and R.C. Prasad, for respondents Nos. 1 and 2.
M.C. Chagla, D.P. Singh, S.C. Agarwal, Uma Dutta and section Chakravarti, for respondent No. 5.
Sobhugmal Jain and Krishna Sen, for respondent Nos. 6 to 8.
The Judgment of the Court was delivered by Hegde, J.
This appeal by certificate arises from the decision rendered on 18th March 1968 by the Patna High Court in C.W.J.C. No. 816 of 1967.
That was a petition filed by the appellant under article 226 of the Constitution praying, inter alia, that the High Court may be pleased to quash the two orders made by the Cane Commissioner, Bihar on November 14, 1967 under which he excluded 99 villages from the area reserved by him in favour of the appellant under cl. 6 of the Sugar Cane (Control) Order 1966 (to be hereinafter referred to as the 'order ') and included those villages in the area reserved in favour of New Siwan Mill (5th respondent in this appeal).
The High Court dismissed that writ petition.
The appellant Co. was established in 1903.
Though its sugar mill is in U.P. it used to draw its sugarcane requirement mainly from the neighboring areas in Bihar State.
The mill in question is within about 100 yards of the Bihar border.
The appellant 's case is that for the last over 30 years the 208 villages of Bihar, with which we are concerned in this appeal had been the principal source of its supply of sugarcane and that the Bihar authorities used to reserve those villages for it.
The appellant claims to have spent huge amount in the development of sugarcane growing areas in the said 208 villages in the course of years.
It also claims to have advanced large sums to the sugarcane growers in the said villages, such sums to be adjusted later on against the price of the sugarcane purchased.
In 1955 the Central Govern 810 ment promulgated the 'order ' in exercise of its powers under the Essential Commodities Act.
One of the main purpose of that order was to regulate the supply and distribution of sugarcane.
Reservation of the said 208 villages in favour of the appellant continued under that order.
But in view of the agitation carried on by the 5th respondent and others, .during the two seasons 1962 63 and 1963 64 those villages were kept unreserved.
Hence any factory was free to make purchases in that area.
Even during that period the appellant continued to get its supplies from that area.
On February 3, 1964, there was a meeting of the Cane Commissioners of Bihar and U.P. with the object of deciding on a long term basis the question of allotting sugarcane grown in the border area among the sugar factories situated near the Bihar U.P. border.
In that meeting it was decided inter alia that the aforementioned 208 villages should be reserved in favour of the appellant; at the same time some of sugarcane growing areas in U.P. were reserved for some of the Bihar sugar mills.
Accordingly the Cane Commissioner of Bihar passed orders reserving the aforementioned 208 villages for the appellant for two seasons i.e. 1964 65 and 1965 66.
For the New Siwan mill (5th respondent) 100 more villages were reserved in Guthani area.
The representation of the New Siwan mill for reserving the 208 villages mentioned earlier was rejected by the Cane Commissioner.
The powers of the Central Government under cls.
6, 7, 8 and 9 of the 'order ' were delegated to the several States and the Cane Commissioners mentioned in the notification issued by the Central Government on July 16, 1966.
The State Government of Bihar and the Cane Commissioner of Bihar are amongst the authorities to whom the powers under those clauses were delegated.
By its order of November 4, 1966, the State Government of Bihar rejected the representation made by New Siwan mill by its application of February 17, 1966 asking for reservation of the 208 villages mentioned earlier.
Thereafter by his order of December 30, 1966, the Cane Commissioner Bihar reserved those villages for the appellant under el.
6(1)(a) of the 'order ' for two seasons (1966 67 and 1967 68).
The New Siwan mill challenged the validity of that order in C.W.J.C. No. 63 of 1967 in the Patna High Court.
The appellant filed its counter affidavit in that proceeding on March 21, 1967.
The application was heard in part on Aprii 13, 1967 and April 14, 1967 but thereafter the case was adjourned.
Later the appellant learnt that the 5th respondent had moved the Chief Minister of Bihar to revoke the reservation made in favour of the appellant.
Apprehending that the appellant 's interest may be jeopardised, one of the Directors of the appellant company wrote to the Chief Minister on June 15, 1967 praying that the reservation made in favour of the appellant should 811 not be disturbed.
Subsequent to that, the appellant made numerous other representations both to the Chief Minister as well as to the Cane Commissioner.
One of the Director of the appellant company met the Chief Minister as well as his Private Secretary.
Meanwhile the 5th respondent was also making representations, to the Chief Minister as well as to the Cane Commissioner.
From the records produced before us, it is clear that the Cane Commissioner was firmly of the opinion that there was no justification for disturbing the reservation made in favour of the appellant.
He strongly recommended to the Chief Minister against interfering with the said reservation.
According to him it was in the interest of the Sugar industry as well as that of the Sugar mills in Bihar not to disturb the agreement arrived at the meeting of the Sugar Cane Commissioners of U.P. and Bihar.
From the records.
produced before us it is seen that one of the grounds urged by the 5th respondent in support of his plea was that while it was a Bihar mill, the appellant was a U.P. mill and as such the Bihar villages should be reserved for its use.
From the note submitted by Shri Taring Sahai, an officer in the Cane Commissioner 's department, to the Assistant Cane Commissioner on July 5, 1967, it is seen that the Chief Minister was interesting himself ' in the controversy between the appellant, and ' the 5th respondent.
That is also clear from the note submitted by section Asanullah another officer in the same department to the Cane Commissioner ' on 7 7 1967.
It is unnecessary to refer to the correspondence that passed between the Cane Commissioner and the Chief Minister but one thing is clear from that correspondence that while the Cane Commissioner was firm in his opinion that the agreement entered into between him and his counter part in U.P. should be respected, the Chief Minister was inclined to alter the reservation made in favour of the appellant.
In the notes submitted by the Assistant Cane Commissioner to the Cane Commissioner we find the following statement: "As verbally ordered by the Cane Commissioner in the background of the above notes of the Assistant Cane Commissioner in connection with the discussions held with the Chief Minister the undersigned examined the geographical positions given in the map.
208 villages of Bihar are reserved for Pratabpur mill.
They are divided as follows: (a) Mirganj police station . 87 (b) Siwan police station . 106 (c) Darauli police station . 15 Total .
208 ", 812 In the note submitted by the Cane Commissioner to the Chic Minister on October 27, 1967, it is stated: "As per order, the above two suggestions (Ka and Kha) have been given for division of 208 villages between the New Siwan Mill and the Pratabpur Mill.
According to one (Ka) the New Siwan Mill gets 121 villages and according to the second proposal (Kha) it gets 99 villages.
As it is clear from the notes of the Assistant Cane Commissioner, the Chief Minister has ordered that most of these 208 villages may be given to the New Siwan Mill.
This order is carried out under proposal 'Kha ', but under it, about 20 22 such villages come as are at a distance of only 2 3 miles from the Pratabpur Mill and the farmers of those villages can also have some objection on account of it.
Hence only after obtaining a clear order from the Chief Minister, the necessary notification will be issued.
Sd/ Illegible 27 10.
" On November 7, 1967, the Chief Minister passed the following order on the above note.
"I agree with the notes as at Kha of page 33.
99 villages be left to the New Siwan Mill and 109 villages to the Pratabpur Mill.
None of the two mills will have the right to keep the weigh bridge of sugar cane collecting centre in the area of each other.
Sd/ Mahamaya Pd.
Sinha 7 11 67.
" On the basis of this direction the Cane Commissioner made the impugned orders on November 14, 1967, which were duly published in the Gazette.
In the High Court the validity of the order made by the Cane Commissioner on November 14, 1967 was challenged on six different grounds i.e. (1 ) that the Cane Commissioner had no jurisdiction to pass those orders; (2) in passing those orders, the Cane Commissioner practically abdicated his statutory functions and mechanically implemented the directions issued by the Chief Minister; (3) the orders are vitiated as the proceeding before the authority culminating in those orders was a quasi judicial proceeding and the authority had failed to afford a reasonable opportunity to the appellant to represent against the orders proposed to be made; (4) even if the proceeding in question should be 813 considered as an administrative proceeding as the orders made involve civil consequence and the proceeding having not been conducted consistently with the rules of natural justice, the impugned orders cannot be sustained; (5) those orders were passed mala fide and lastly (6) they are discriminatory against the petitioner and hence hit by article 14 of the Constitution.
The High Court rejected every one of the contentions.
It came to the conclusion that the Cane Commissioner who had the power to make reservations under cl. 6 of the 'order ' had also the power to modify Or cancel those reservations in view of section 21 of the General Clauses Act; the impugned orders were that of the Cane Commissioner both in fact as well as in law; the proceeding before the Cane Commissioner which resulted in making the impugned orders is a purely administrative proceeding; even if it is considered to be quasi judicial proceeding, reasonable opportunity had been given to the appellant to represent its case and in fact it had represented its case fully and effectively; the plea of mala fide is unsubstantiated and the orders in question did not contravene article 14 of the Constitution.
In this Court Shri A.K. Sen, learned Counsel for the appellant attacked the impugned order on the following grounds: (1) The orders in question though purported to have been made by the Cane Commissioner, were in fact not so; the Cane Commissioner merely acted as the mouth piece of the Chief Minister; in truth he had abdicated his statutory functions and therefore the orders are bad; (2) Every proceeding to modify any reservation made under cl.
6 of the 'order ' is a quasi judicial proceeding.
As the impugned modifications were made without affording the appellant reasonable opportunity for representing its case they are bad in law; (3) Even if the said proceeding is considered as an administrative proceeding, the impugned orders are liable to be set aside on the basis of the rule laid down by this Court in State of Orissa vs Dr. (Miss) Binapani Dei and Ors.
(1), and ( 4 ).
The impugned modifications contravene article 301 of the Constitution.
Shri Sen did not address any arguments on the last ground formulated by him.
Therefore we shall not deal with the same.
The contentions of Shri M.C. Chagla, learned Counsel for the State of Bihar as well as the 5th respondent were as follows: Though the Cane Commissioner had consulted the Chief Minister, the impugned orders were really made by the former, hence it cannot be said that he had abdicated his statutory func (1) ; 814 tions.
According to him, the proceeding before the Cane Commissioner was administrative in character and to such a proceeding rules of natural justice are not attracted.
He further urged that even if it is held that the said proceeding was a quasi judicial proceeding, there was no contravention of the principles of natural justice as the appellant had represented his case fully both before the Chief Minister as well as before the Cane Commissioner.
Before we proceed to examine the contentions advanced on behalf of the parties, it is necessary to refer to the relevant provisions of law.
Clause 5 of the 'order ' which deals with the power to regulation, distribution and movement of sugarcane reads as under: (1) The Central Government may, by order notified in the official gazette: (a) reserve any area where sugarcane is grown (hereinafter in this clause referred to as reserved area) for a factory having regard to the crushing capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugarcane required by it; (b) determine the quantity of sugarcane which a factory will require for crushing during any year; (c) fix, with respect to any specified sugarcane grower or sugarcane growers generally in a reserved area, the quantity or percentage of sugarcane grown by such grower or growers, as the case may be, which each such grower by himself or, if he is a member of a co operative society of sugarcane growers operating in the reserved area, through such society; shall supply of the factory concerned; (d) direct a sugarcane grower or a sugarcane growers ' cooperative society supplying sugarcane to a factory, and the factory concerned to enter into an agreement to supply or purchase, as the case may be, the quantity of sugarcane fixed under paragraph (c); (e) direct that no gur (jaggery) or khandsari sugar or sugar shall be manufactured from sugarcane except under and in accordance with the conditions specified in the licence issued in this behalf; (f) prohibit or restrict or otherwise regulate the export of sugarcane from any area (including a reserved 815 area) except under and in accordance with a permit issued in this behalf.
(2) Every sugarcane grower, sugarcane growers ' co operative society and factory, to whom or to which an order made under paragraph (c) of sub clause (1) applies, shall be bound to supply or purchase, as the case may be, that quantity of sugarcane covered by the agreement entered into under the paragraph and any wailful failure on the part of the sugarcane growers ' cooperative society or the factory to do so, shall constitute a breach of the provisions of this Order: Provided that where the default committed by any sugarcane growers ' co operative society is due to any failure on the part of any sugarcane grower, being a member of such society such society shall not be bound to make supplies of sugarcane to the factory to the extent of such default.
Clause (11 ) deals with delegation of powers.
It reads: "The Central Government may, by notification in the Official Gazette, direct that all or any of the powers conferred upon it by this Order shall, subject to such restrictions, exceptions and conditions, if any, as may be specified in the direction, be exercisable also by: (a) any officer or authority of the Central Government; (b) a State Government or any officer or authority of a State Government." As seen earlier, the Central Government had delegated its power under cl.
(6) to the State Government of Bihar as well as to the Cane Commissioner, Bihar.
In the matter of exercise of the power under rule 6(1) the State Government and the Cane Commissioner are concurrent authorities.
Their jurisdiction is co ordinate.
There was some controversy before us whether a Cane Commissioner who had reserved an area for a sugar factory for a particular period can alter, amend, or modify the area reserved in the middle of the period fixed.
As seen earlier 208 villages With which we are concerned in this case were reserved for the appellant for two seasons i.e. 1966 67 and 1967 68.
The contention was that the Cane Commissioner could not have interfered with that reservation within that period.
The High Court has come to the conclusion that the Cane Commissioner who had the power to make the reservation in question must be held to have had the power to alter or modify that reservation.
But it is not necessary for us to pronounce on this question as we are of the opinion that the 816 impugned orders though purported to have been made by the Cane Commissioner were in fact made by the Chief Minister and hence they are invalid.
We have earlier seen that the Cane Commissioner was definitely of the view that the reservation made in favour of the appellant should not be disturbed but the Chief Minister did not agree with that view.
It is clear from the documents before us that the Chief Minister directed the Cane Commissioner to divide the reserved area into two portions and allot one portion to the 5th respondent.
In pursuance of that direction, the Cane Commissioner prepared two lists 'Ka ' and 'Kha".
Under the orders of the Chief Minister, the villages contained in list 'Ka ' were allotted to the appellant and in list 'Kha ' to the 5th respondent.
The Cane Commissioner merely carried out the orders of the Chief Minister.
It is true that the impugned orders were issued in the name of the Cane Commissioner.
He merely obeyed the directions issued to him by the Chief Minister.
We are unable to agree with the contention of Shri Chagla that though the Cane Commissioner was initially of the view that the reservation made in favour of the appellant should not be disturbed, he changed his opinion after discussion with the Chief Minister.
From the material before us, the only conclusion possible is that the Chief Minister imposed his opinion on the Cane Commissioner.
The power exercisable by the Cane Commissioner under cl.
6(1) is a statutory power.
He alone could have exercised that power.
While exercising that power he cannot abdicate his responsibility in favour of anyone not even in favour of the State Government or the Chief Minister.
It was not proper for the Chief Minister to have interfered with the functions of the Cane Commissioner.
In this case what has happened is that the power of the Cane Commissioner has been exercised by the Chief Minister, an authority not recognised by cl.
(6) read with cl.
(11) but the responsibility for making those orders was asked to be taken by the Cane Commissioner.
The executive officers entrusted with statutory discretions may in some cases be obliged to take into account considerations of public policy and in some context the policy of a Minister or the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve them from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for them to be given binding instructions by a superior.
In Commissioner of Police, Bombay vs Gordhandas Bhanji(1) this Court struck down the order purported to have been passed by the Commissioner of Police in the exercise of his powers (1) ; 817 under the Bombay Police Act and the rules made thereunder as the order in question was in fact that of the Government.
The rule laid down in that decision governs the question under consideratiing.
This Court reiterated that rule in State of Punjab vs Hari Kishan Sharma(1).
Therein this Court held that the State Government was not justified in assuming jurisdiction which had been conferred on the licensing authority by section 5 (1 ) and (2) of the Punjab Cinemas (Regulation) Act.
For the reasons mentioned above we hold that the impugned orders are liable to be struck down as they were not made by the prescribed authority.
This takes us to the question whether the proceeding which resulted in making the impugned orders is a quasi judicial proceeding or an administrative proceeding.
There was some controversy before us whether a proceeding under el.
6(1) of the 'order ' is a quasi judicial proceeding.
It is not necessary for us to decide that question as in this case we are only concerned with the proceeding which resulted in making the impugned orders.
In that proceeding the only question before the authorities was whether all or some of the villages reserved for the appellant should be taken out from the reserved area and reserved for the 5th respondent.
The plea of the 5th respondent was that all those villages should be reserved for it whereas the appellant insisted that the reservation made in its favour should not be disturbed.
Whether there was a lis between the appellant and the 5th respondent at an earlier stage or not, we are of the opinion, as soon as the 5th respondent moved the Government for altering or modifying the reservation made in favour of the appellant, a lis commenced.
The dispute that arose between the appellant and the 5th respondent had to be decided on the basis of the objective criteria, prescribed by cl. 6 of the 'order ' i.e. (1) the crushing capacity of the appellant mill; (2) the availability of the sugarcane in the reserved area and (3) the need for the production of sugar.
There is hardly any doubt that the modification of the reservation made in favour of the appellant would have had serious repercussions on the working of the appellant 's mill.
It was bound to affect its interests adversely.
Hence it is not possible to accept the conclusion of the High Court that the proceeding before the Cane; Commissioner was not a quasi judicial proceeding.
The impugned orders are similar to orders revoking or modifying licenses.
It would not be proper to equate an order revoking or modifying a licence with a decision not to grant a licence.
Therefore Shri Chagla is not right in his contention that (1) ; 818 in this case we are called upon to deal with a privilege and not right.
As observed by S.A. De Smith in his Judicial Review Administrative Action (2nd Edn.) at p. 211: "To equate a decision summarily to revoke a licence with a decision not to grant a licence in the first instance may be still more unrealistic.
Here the "privilege" concept may be peculiarly inapposite; and its aptness has not been enhanced by the manner in which it has been employed in some modern cases.
It is submitted that the courts should adopt a presumption that prior notice and opportunity to be heard should be given before a licence can be revoked.
The presumption should be rebuttable in similar circumstances to those in which summary interference with vested property rights may be permissible.
That the considerations applicable to the revocation of licences may be different from those applicable to the refusal of licences has indeed been recognised by some British statutes and a number of judicial decisions in other Commonwealth jurisdictions.
" In Province of Bombay vs Kusaldas section Advani and Ors.(1) Das, J. formulated the following tests to find out whether proceeding before an authority or a tribunal . 'is a quasi judicial proceeding : (i) that if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi judicial act; , 'red (ii) that if a statutory authority has power to do any act which will prejudicially affect the subject, then although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi judicial act provided the authority is required by the statute to act judicially.
These tests were adopted by this Court in Shivji Nathubhai vs The Union of India and Ors.(2).
Therein this Court was (1) ; at p. 725.
(2) ; 819 considering the validity of cancellation in review by the Central Government a mining lease granted by the State Government.
In that context this Court held that even if the act of the State Government in granting a mining lease was an administrative act, it was not correct to say that no right of any kind passed to the lessee until the review was decided by the Central Government where a review had been applied for.
Rule 52 of the rules framed under the Mines and Minerals (Regulation and Development) Act, No. 53 of 1941 which gives the aggrieved party the right to a review created a lis between him and the lessee and, consequently, in the absence of anything to the contrary either in rule 54 or the statute itself there could be no doubt that the Central Government is required to act judicially under rule 54.
This Court in Board of High School and Intermediate Education U.P, Allahabad vs Ghanshyam Das Gupta and Ors.(1) held that where the statute in question is silent as to the manner in which the power conferred should be exercised by the authority acting under it, the exercise of power will depend on the express provisions of the statute read alongwith the nature of the rights affected, the manner of disposal provided, the objective criteria, if any, to be adopted, the effect of the decision on the persons affected and other indicate afforded by the statute.
The mere fact that the Act in question or the relevant Regulations do not make it obligatory on the authority to call for an explanation and to hear the person concerned is not conclusive on the question whet her the authority has to act as a quasi judicial body when exercising its power under the statute.
On applying the various tests enunciated in the above decisions, there is hardly any doubt that the proceeding before the Cane Commissioner was a quasi judicial proceeding.
In this connection reference may be usefully made to the decision of the Court of Appeal of New Zealand in New Zealand Dairy Board vs Okitu Co operative Dairy Co., Ltd.(2).
We are referring to that decision because the facts of that case bear a close resemblance to the facts of the present case.
Therein as a result of a Zoning Order made by the Executive Commissioner of Agriculture in May 1937, the respondent dairy company, carrying on business in Gisborne and the surrounding district, and the Kia Ora Co operative Dairy Co. Ltd. became entitled to operate exclusively in a defined area in the Gisborne district.
They were excluded from operating outside that area.
The zoning conditions so established continued to exist until 1950, when the appellant Board issued the zoning orders which were impugned in that case.
It may be noted that the zoning orders were made in the exercise of the statutory power conferred on the appellant board.
[1962] Supp. 3 S.C.R. 36.
(1953) New Zealand Law Reports p. 366.
820 Before 1942, the respondent Co. was approached by the Health Department with a request that it undertakes the treatment and supply of pasteurised milk to the public ' schools, and it was informed that other dairy companies had declined the proposal.
the company complied with the request, after overcoming the difficulties of finance.
The scheme was put into operation.
In 1942 the respondent company put up a treatment plant and expanded its business.
This expansion resulted in an annual turnover in the company 's milk department going upto about A 90,000 as against pound 43,000 in its butter department.
In March, 1950, the Kia era company, by letter, expressed its desire that the appellant Board (which had been substituted by regulation for the Executive Commission) should examine the question of cream and milk supplies in the Gisborne and surrounding districts.
This letter was, in substance, an application to the Board to review the whole question of zoning and to require the respondent company to cease the manufacture of butter.
Moreover the letter set out the circumstances in a manner prejudicial to the respondent company.
After various meetings and negotiations between the appellant Board, companies concerned, and interested parties, at none of which were the contents of the Kia Ora company 's letter to the Board disclosed to the respondent company, no agreement was reached.
The result of discussions with the Kia Ora company and detailed replies to complaints were given to the Board by the respondent company, and its letter ended with a statement to the effect that it would appreciate the privilege of appearing before the full Board with the object of stating its case more fully or of answering any questions.
The Board ignored this specific request.
At a full meeting of the Board held on May 31, 1950, the Board decided that only one butter factory should operate in the Gisborne district.
On August 3, the Board by resolution, decided to give notice of its intention of issuing a zonal order to operate as from October 1, 1950 assigning to the Kia Ora company the cream collection area over which the two companies then operated.
On August 29, the respondent company wrote to the Board protecting against its proposal and asking for recession of the Board 's resolution and ,for an opportunity of being heard.
On September 2, 1950, the appellant Board in exercise of the power conferred upon it by Regulation 716 of the Dairy Factory Supply Regulations, 1936 and in terms of its resolution of August 3, 1950, made Zoning Order No./20 which was the subject of the proceedings before the Supreme Court of New Zealand.
That order was to come into force on October 1, 1950.
Its effect was to assign exclusively to the Kia Ora Co. the area defined in Zoning Order (No. 30) of 1937 as that in which the two companies could jointly collect cream produced in supplying dairies situated in that area, and ' to prohibit the res 821 pondent dairy company after October 1, 1950 from collecting or receiving any cream so produced for the purposes of manufacture into cream or butter.
The respondent company and others presented a petition to the Parliament praying for relief and remedy by way of legislation either in the direction of reversing and setting aside the Board 's decision in the matter of the zoning order or setting aside such decision and rehearing of the matter by an independent tribunal.
The petition was heard by a select Committee of the House of Representatives, which decided to make no recommendation on the petition.
On August 4, the Board made an amended Zoning Order (No. 120A) postponing until June 1, 1951, the date of the coming into operation of Zoning Order No. 120 already made, but otherwise confirming that order.
The respondent company commenced an action against the Board claiming (a) a declaration that Zoning Orders Nos. 120 and 120A issued by the Board were invalidly passed and were of no legal effect; (b) an order of certiorari to remove into the Supreme Court and quash the zoning orders; and (c) an injunction restraining the Board from carrying out its intention of promulgating the zoning orders or from proceeding further or exercising any jurisdiction in accordance with the same.
The action was heard by Mr. Justice Hay, who found that, in the conduct of the inquiry instituted by the Board, following the application made to it by the Kia Ora Company, there was, in the various respects mentioned in the judgment, a departure from those principles of natural justice which were incumbent on the Board; and in particular, the plaintiff company was denied a hearing on the crucial issue as to whether or not a zoning order should be made.
The learned Judge held that the plaintiff company was entitled to succeed in the action in respect of all the reliefs it claimed and he gave the judgment in its favour with costs against the Board.
The Court of Appeal affirmed by majority the judgment of the learned trial judge.
The Court held that the New Zealand Dairy Board in making its zoning order No. 120 on September 1, 1950 was determining a question affecting the rights of the respondent company and further that the order of the Board was that of a body that was, at least primarily, an administrative body and the question whether such a body was under a duty to act judicially in the course of arriving at an administrative decision was to be determined on the true construction of the authorising legislative provisions and the conditions and circumstances under which, and in which, the jurisdiction fell to be exercised.
It held that on the facts and circumstances of the case the power exercised by the Board vitiated as the Board had failed to conform to the principles of natural justice in making the zoning order in question and hence the same is unsustainable.
The decision 822 Of the Privy Council in James Edward Jeffs and Ors.
vs New Zealand Dairy Production and Marketing Board and Ors.
(1) proceeded on the basis that the aforementioned decision of the Court of Appeal is correct.
Shri Chagla contended that even if we are to hold that the power exercised by the authorities in making the impugned orders had to be exercised judicially, on the facts of his case we must hold that there was no contravention of the principles of natural justice.
He took us to the various representations made by the appellant.
According to him the appellant had stated in its representations to the authorities all that it could have said on the subject.
Therefore we should not hold that there was any contravention of the principles of natural justice.
It is true as observed by this Court in Suresh Koshy George vs The University Kerala and Ors.(2) that "the rules of natural justice are not embodied rules.
The question whether the requirements of natural justice have been met by the procedure adopted in a given case must depend to a great extent on the facts and circumstances of the case in point, the constitution of the tribunal and the rules under which it functions.
" In this case what has happened is that both the appellant as welt as the 5th respondent were making repeated representations to the Chief Minister as well as to the Cane Commissioner.
The representations made by the 5th respondent or even the substance thereof were not made available to the appellant.
The proposal to split the reserved area into two or the manner in which it was proposed to be split was not made known to the appellant and his objections invited in that regard.
The appellant complains that the manner in which the area had been divided had caused great prejudice to it.
Its grievance may or may not be true but the fact remains that it had no opportunity to represent against the same.
Hence the appellant is justified in complaining that the principles of natural justice had been contravened.
In view of our finding that the proceeding which resulted in the making of the impugned orders was a quasi~judicial proceeding, it is unnecessary to decide whether the impugned orders could have been validly made in an administrative proceeding.
We see no merit in the contention advanced on behalf of the 5th respondent that the Cane Commissioner was not competent to reserve the area in question for the appellant as its mill is in U.P.
The reserved area is in Bihar.
The Cane Commissioner of Bihar had power to reserve that area for any sugar mill whether situated in Bihar or not.
[1967] A.C. 551.
(2) ; 823 The contention of Shri Chagla that as no orders had yet been passed under cls.
6(c) and (d) of the 'order ' the ,appellant cannot be considered as an aggrieved party is not correct.
As soon as a portion of the area reserved for the appellant was ordered to be taken away and added to the reserved area of the 5th respondent, the appellant 's interest was adversely affected.
Therefore it is immaterial for the appellant what orders are passed under sub cls.
(c) and (d) of el.
6 of the 'order ', because it can no more get any sugarcane from the area in question.
What hurts the appellant is the impugned orders and not the further orders that may be passed.
For the reasons mentioned above this appeal is allowed and the orders impugned quashed.
The State of Bihar as well as the 5th respondent shall pay the costs of the appellant both in this.
Court as well as in the High Court.
G.C. Appeal allowed. | The Sugar Cane (Control) Order, 1955 was promulgated by the Central Government in the exercise of its powers under the Essential Supplies Act.
Under cl. 6 of the Order the Central Government could reserve any area where sugarcane was grown for a factory taking into account various relevant 'factors.
Clause 11 allowed the Central Government to delegate its power under el. 6, and the Central Government by a notification dated July 16, 1966 delegated the said power to the several State Governments and the Cane Commissioners of those States.
The appellant was a sugar mill situated in U.P. near the border of Bihar State.
For a long time its source of supply of sugarcane had been the neighboring area of Bihar State consisting of 208 villages.
For the seasons 1966 67 and 1967 68 the 5th respondent a sugar mill situate on the Bihar side of the order sought to have the area reserved for itself but by order dated November 30, 1966 the request was rejected by the State Government.
In December 1966 the Cane Commissioner, Bihar passed an order under el.
6(1) of the Sugar Cane (Control) Order reserving the said area of 208 villages for the appellant for the seasons 1966 67 and 1967 68.
The 5th resportdent made representations to the Chief Minister.
Acting on directions given by the Chief Minister the Cane Commissioner, Bihar passed orders on November 14, 1967, whereby by a notification in the Bihar Government Gazette 121 of the aforesaid villages were reserved for the appellant and 99 villages for the 5th respondent.
The appellant filed a writ petition in the High Court challenging this order of the Cane Commissioner but the petition was rejected.
With certificate appeal was filed in this Court.
The contentions urged on behalf of the appellant were: (i) The orders in question though purported to have been made by the Cane Commissioner were in fact not so, and were therefore invalid; (ii) Every proceeding to modify any reservation under cl. 6 is a quasi judicial proceeding.
As the impugned notifications were made without affording the appellant reasonable opportunity for representing its case they were bad in law; (iii) Even if the said proceeding was considered an administrative proceeding the impugned orders were liable to be set aside on the basis of the rule laid down by this Court in State of Orissa vs Dr. (Miss) Binapani Dei, ; HELD: (i) From the material on record the only conclusion possible was that the Chief Minister imposed his opinion on the Cane Commissioner.
The power exercisable by the Cane Commissioner under cl.
6(1) is a statutory power.
He alone could have exercised that power.
While exercising that power he cannot abdicate his responsibility in favour of anyone not even in favour of the State Government or the Chief Minister.
It was not proper for the Chief Minister to have interfered with the 808 functions of the Cane Commissioner.
In this case what had happened was that the power of the Cane Commissioner had been exercised by the Chief Minister, an authority not recognised by el.
(6) read with cl.
(11) but the responsibility for making those orders was asked to be taken by the Cane Commissioner.
The executive officers entrusted with statutory discretions may in some cases be obliged to take into account considerations of public policy and to some context the policy of a Minister or the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve .
them from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for them to be given binding instructions by a superior.
[816] Commissioner of Police, Bombay vs Gordhandas Bhanji, ; and State of Punjab vs Hari Kishan Sharma, A.I R. , applied.
(ii) As soon as the 5th respondent moved the Government for altering or modifying the reservation made in favour of the appellant, a lis commenced.
The dispute that arose between the appellant and the 5th respondent had to be decided on the basis of the objective criteria, prescribed by el. 6 of the order i.e. (1 ) the crushing capacity of the appellant mill; (2) the availability of the sugarcane in the reserved area and (3) the need for the production of sugar.
There could hardly be any doubt that the modification of the reservation made in favour of the appellant would have had serious repercussions on the working of the appellant 's mill.
It was bound to affect its interests adversely.
Hence it was not possible to accept the conclusion of the High Court that the proceeding before the Cane Commissioner was not a quasi judicial proceeding.
[817 E H] Province of Bombay vs Kusaldas section Advani & Ors., ; at p. 725, Shivji Nathubhai vs The Union of India, ; , Board of High School and Intermediate Education U.P. Allahabad vs Ghanshyam Das Gupta & Ors., [1962] 3 Supp.
S.C.R. 36.
New Zealand Dairy Board vs Okitu Co operative Dairy Co. Ltd., (1953) New Zealand Law Reports.
p. 366, and James Edward Jeffs & Ors.
vs New Zealand Dairy Production & Marketing Board & Ors., [1967] A.C.p. 551, referred tO. (iii) In the present case both the appellant and the 5th respondent were making repeated representations to the Chief Minister as well as to the Cane Commissioner.
The representations made by the 5th respondent or even the substance thereof were not made available to the appellant.
The proposal to split the reserved area into two or the manner in which it was proposed to be split was not made known to the appellant and his objection invited in that regard.
It had no opportunity to represent against the same.
Hence the appellant was justified in complaining that the principles of natural justice had been contravened.
[822 D F] Suresh Koshy George vs The University of Kerala & Ors., ; , referred to.
(iv) The appellant 's interest was adversely affected by the impugned order and the contention of the respondent that as no orders had been passed under cls.
6(c) and (d) of the 'order ' the appellant could not be considered as an aggrieved party.
was not correct.
[823 A] 809 [The Court did not consider it necessary to decide the questions (a) whether the impugned orders could have been validly made in an administrative proceeding, (b) whether the Cane Commissioner who. had the power to make the reservation in question also had the power to alter or modify that reservation] |
Appeal No. 1110 of 1965.
Appeal from the judgment and decree dated July 6, 1959 of the Patna High Court in First Appeal No. 235 of 1951.
Sarjoo Prasad and B.P. Jha, for the appellants.
C.B. Agarwala, P.K. Chatterjee and R.B. Datar, for the respondents (in Excepting respondents Nos.
15(b) to 15(d).
The Judgment of the Court was delivered by Bachawat, J.
This appeal arises out of Title Suit No. 12/9 of 1946 instituted in the Court of the First Additional Subordinate Judge, Darbhanga.
The plaintiffs claimed declaration of their title and possession in respect of 70 bighas of land in plot No. 1083 in village Siripur Majrahia.
They obtained settlements of the lands from the deity Shri Radhakrishan Jee Baldeojee.
The deity was the 16 annas proprietor of village Siripur Majrahia Pergana Jankhalpur, Tauzi No. 2794.
The river Karey flows between this village and the villages of Kazi Dumra and Shankarpur.
The contesting defendants were the landlords and tenants of villages Kazi Dumra and Shankarpur.
The deity was defendant No. 18 and was represented 'by one Tantreshwar Singh.
The plaintiffs claimed that in consequence of the changes in the channel of the river Karey the lands in suit were lost to villages Kazi Dumra and Shankarpur by diluvion and were annexed to plot No. 1083 in village Siripur Majrahia by gradual increment and accretioan.
The trial Court dismissed the suit.
It held that (1) the suit lands did not accrete to plots Nos. 1083 and 1089 in village Sirlput Majrahia due to slow, gradual and imperceptible changes in the channel of the river Karey, (2) there was no custom in the village by which the disputed lands became the property of the owner of those plots, (3) the deity Radha Krishanji Baldeoji or the owner of village Siripur Majrahia did not obtain possession of the lands in the manner ,alleged in the plaint, (4) the lands originally belonged to the proprietors of villages Kazi Dumra and Shankarpur and continued to be their property and (5 ) the plaintiffs failed to prove their title and possession in respect of the suit lands within 12 years before the date of the institution of the suit.
The plaintiffs filed F.A. No. 291 of 1951 in the High Court of Patna against the decree passed by the Trial Court.
The deity Shri Radha Krishanji Baldeoji, the original defendant No. 18 was 973 impleaded as respondent No. 23 in the appeal.
By an order dated January 24, 1952 the High Court appointed the Deputy Registrar as the guardian of the deity.
On February 18,.1952 the High Court passed the following order : "Two week 's further time is allowed to deposit D.R. guardian 's cost for respondent No. 23 (deity) failing which this appeal shall stand dismissed against him without further reference to a Bench." This peremptory order was not complied with and on the expiry of the two weeks the appeal stood dismissed 'against the deity.
At the hearing of the appeal the contesting defendants urged that the entire appeal became incompetent in view of the dismissal of the appeal against the deity.
The High Court accepted this contention and dismissed the appeal in its entirety.
The High Court held that there was a clear issue between defendant No. 18 and the contesting defendants as to whether the lands formed part of the village Siripur Majrahia, that the issue stood concluded against defendant No. 18 by the decree of the Trial Court, that the appeal had abated against defendant No. 18 and that as success in the appeal might lead to conflicting and inconsistent decrees, the appeal against all the defendants became incompetent.
The present 'appeal has been filed by the plaintiffs after obtaining a certificate from the High Court.
Clearly, the High Court was in error in holding that the appeal had abated either wholly or in part.
None of the parties to the appeal had died and there was no question of the abatement of the appeal.
Mr. C.B. Agarwala relying on the case of Munni Bibi vs Trilokinath(1) submitted that the decision of the Trial Court on the question whether the suit lands appertained to village Siripur Majrahia operated as res judicata between the deity and the contesting co defendants, that the appellate court could not record an inconsistent finding that the suit lands appertained to village Siripur Majrahia, and that in the circumstances, the entire appeal before the High Court became incompetent.
We are unable to accept these contentions.
The plaintiffs claiming as tenants of the deity sued the contesting defendants for declaration of their title and possession in respect of the suit lands on the allegation that the lands appertained to village Siripur Majrahia of which the deity was the proprietor.
The deity was not a necessary party to the suit.
It was joined as a defendant, but no relief was claimed against it.
The suit was dismissed on a finding that the suit lands did not appertained to village Siripur Majrahi 'a.
The plaintiffs filed an appeal against the decree impleading the deity as one of the respondents.
The appeal was dismissed against the deity for non(1) L.R. 58 I.A. 158.
974 payment of costs of its guardian ad litem.
The deity was not a necessary party to the appeal.
The plaintiffs were entitled to prosecute their appeal against the contesting defendants in the absence of the deity.
As soon as the appeal was filed by the plaintiffs in the High Court the decision of the Trial Court lost its character of finality and the question whether the suit lands appertained to village Siripur Majrahia became once again res sub judice.
The case of Munni Bibi vs Trilokinath(1) shows that a decision operates as res ludicata between co defendants if (1) there is a conflict of interest between them; (2) it is necessary to decide that conflict in order to give the plaintiffs the reliefs which they claim and (3 ) the question between the co defendants is finally decided.
In the present case, the third condition was not satisfied.
The question whether the suit lands appertain to Siripur Majrahia was not finally decided between the deity and the co defendants.
On the filing of the appeal by the plaintiffs, the question became once more subject of judicial inquiry between the deity and the contesting defendants.
Before the 'appeal was finally heard and decided, it was dismissed as against the deity for non payment of its guardian 's costs.
The appellate court did not give any decision on the merits of the case in the presence of the deity.
There is no final decision against the deity on the question of the title to the suit lands.
The decision of the 'appellate court against the contesting defendants will not lead to conflicting and inconsistent decrees.
The High Court was in error in holding that the appeal against the contesting defendants became incompetent.
In the circumstances the High Court ought to have decided the appeal before it on the merits.
Counsel for the parties agreed that the decision of the present appeal on the merits would abide by the decision in C.A. No. 140 of 1966 arising out of T.S. No. 29/11 of 1946.
That suit and T.S. No. 12/9 of 1946 out of which the present appeal arises were heard together by the Trial Court and disposed of by a common judgment.
In C.A. No. 140 of 1966 we have held that the disputed lands appertained originally to village Kazi Dumra and Shankarpur, that due to the recession of the river Karey the lands reformed in situ and that the property in the lands continued to remain with the proprietors of the lands in villages Kazi Dumra and Shankarpur.
The plaintiffs failed to prove that the deity Shri Radha Krishnaji Baldeoji came into possession of the disputed land as alleged in the plaint.
There was no issue on the question whether the deity had acquired title to the suit lands by adverse possession.
The plea of acquisition of title by adverse possession cannot be raised for the first time at the appellate stage.
The plaintiffs failed to establish acquisition of title of the deity to any portion cf the suit lands by adverse (1) L.R. 58 I.A. 158.
975 possession.
It follows that there was no merit in F.A. No. 235 of 1951.
Although the High Court did not decide this appeal on the merits, it is not necessary to remand the matter to the High Court.
Having regard to our findings in C.A. No. 140 of 1966, T.S. No. 12/9 of 1946 also must be dismissed.
In the result, the appeal is dismissed.
There will be no order to costs.
Y.P. Appeal dismissed. | The plaintiffs (appellants herein) obtained settlements of certain land owned by a deity in village Siripur Majrahia in Bihar.
The contesting defendants (respondents herein) owned lands in the villages of Kazi Dumra and Shankarpur which were separated from Siripur Majrahia by a river.
The plaintiffs claimed that in consequence of the changes in the channel of the aforesaid river the lands in suit were lost to villages Kazi Dumra and Shankarpur by diluvion and were annexed to their land in village Siripur Majrahia by gradual increment and accretion.
The deity was also made defendant No. 18 in the suit although no relief was claimed against it.
The trial court dismissed the suit and the plaintiffs appealed to High Court, again impleading the deity as a respondent.
They, however, failed to deposit the cost of the guardian ad litem of the deity appointed by the High Court and the Court thereupon dismissed the appeal as against the deity.
The contesting defendants urged at the hearing that the entire appeal had become incompetent in view of the dismissal of the appeal against the deity.
Accepting the contention the High Court dismissed the appeal.
It held inter alia, that the appeal had abated against the deity.
The plaintiffs filed appeal, with certificate, in this Court.
On behalf of the respondents reliance was placed on Muni Bibi vs Trilokinath and it was urged that the decision of the trial court on the question whether the suit lands appertained to village Siripur Majrahia operated as res judicata between the deity and the contesting co defendants, that the appellate court could not record an inconsistent finding that the suit lands appertained.
to village Siripur Majrahia and that in the circumstances, the entire appeal before the High Court had become incompetent.
HELD: (i) The High Court was in error in holding that the appeal had abated either wholly or in part.
None of the parties to the appeal had died and there was no question of abatement of the appeal.
[973 E] (ii) The deity was not a necessary party to the appeal and the plaintiffs were entitled to prosecute: their appeal against the contesting defendants in the absence of the deity.
[973 G H; 974 A B] (iii) The case of Muni Bibi vs Trilokinath shows that a decision operates as res judicata between co defendants if (1) there is a conflict of interest between them; (2) it is necessary to decide that conflict in order to give the plaintiffs the reliefs which they claim and (3) the question between the co defendants is finally decided.
In the present case the third condition was not satisfied.
The question whether the suit lands appertained to Siripur Majrahia was not finally decided between the deity and the co defendants.
On the filing of the appeal by the plaintiffs, the question became once more the subject of judicial enquiry between the deity and the contesting defendants.
[974 B D] Muni Bibi vs Trilokinath, L.R. 58 I.A. 158, referred to.
972 (iv) Before the appeal was finally heard and decided, it was dismissed as against the deity for non payment of its guardian 's costs.
The appellate court did not give any decision on the merits of the case in the presence of the deity.
There was no final decision against the deity on the question of title to the suit lands.
The decision of the appellate court against the contesting defendants would not lead to conflicting and inconsistant decrees.
The High Court was in error in holding that the appeal against the contesting defendants became incompetent.
[974 D E] |
l. Appeal No. 2095 of 1968.
16 Appeal from the judgment and order dated September 17, 1968 of the Mysore High Court in Writ Petition No. 1889 of 1968.
D. Narsaraju, M. C. Chagla, R. V. Pillai, Subodh Markendya and M. Narayana Reddy, for the appellant.
M. C. Setalvad, B. R. L. Iyengar and section P. Nayar, for respondents Nos. 1 to 3.
M. K. Nambyar, Shivaswamy and R. Gopalakrishnan, for respondent No. 4.
The Judgment of the Court was delivered by Bachawat J.
This appeal raises the question of the legality of the cancellation of the sale to the appellant of the exclusive privilege of retail vend of toddy and arrack for the year 1968 69 in a group of 1168 shops in Raichur and Gulbarga districts under the Mysore Excise Act, 1965 and the Mysore Excise (Disposal of Privileges of Retail Vend of Liquors) Rules, 1967.
On May 10, 1968 the excise commissioner of Mysore published a notice stating that the exclusive privilege would be sold by tender cum auction by the divisional commissioner, Gulbarga on May 28 and inviting tenders by May 27.
On May 27, the appellant made a tender offering Rs. 9,99,999/ towards the monthly rental of the shops and deposited the requisite earnest money amounting to Rs. 1,85,168/ as required by r. 7(f).
Respondent No. 4 K.V. Niranjan made a tender offering Rs. 9,69,999/ towards the monthly rental.
The appellant was the only bidder present at the auction on May 28.
His offer being the highest was accepted by the divisional commissioner, Gulbarga, under r. 17(1).
The appellant deposited another sum of Rs. 8,14,831/ which together with the earnest money made up one month 's rent as required by r. 17(5).
On June 4, the divisional commissioner, Gulbarga, confirmed the sale under r. 17(1).
On June 6, the deputy commissioner, Gulbarga, issued a notice asking the appellant to make deposits according to r. 19 immediately and to obtain licences from the concerned tahsil officers after completing other formalities.
Under r. 19(2) the appellant was required to deposit another one month 's rent within 15 days from the date of the sale.
By June 15, the appellant deposited in all Rs. 39,99,996/ amounting to 4 months ' rent.
By a letter (exhibit B 1) the appellant informed the excise commissioner that he had deposited 4 months ' rent as required by circular No. EXE.
1. 15 7 5 issued by the excise commissioner on December 12, 1967 and asked for permission to obtain licences from the deputy commissioners of Raichur and Gulbarga.
On June 18/19 he applied to the divisional commissioner, Gulbarga, for the issue of licences.
June 19, the divisional commissioner, issued a 17 notice to the appellant stating that as he had not submitted a solvency certificate of his property or the property of his sureties he was required to deposit the balance to make up six months ' rent as required by r. 19 (3 ) (i) and to furnish security for six months rental or sureties as require by r. 19(3) (ii) and (iii) by June 25, and that in default action would be taken under r. 20(2).
A notice to the same effect was given orally on June 19, when he met the divisional commissioner at Bellary.
On June 22, he presented a petition under section 62 to the, state government asking for the issue of licences, as he had complied with the conditions of the circular.
In view of the subsequent writ petition the government did not pass any orders on this petition.
The notice dated.
June 19 was received by the appellant on June, 23.
On June 25, he wrote to the divisional commissioner stating, that he had complied with the conditions of the rules read with the, circular and was entitled to the licences, that he had reason to believe that necessary orders would be passed by the state: government on his petition under section 62 and that if necessary, the terms for compliance with the requirements of r. 19 be extended.
by two months.
On the same date the divisional commissioner, rejected the application for extension of time, and issued a notice to the appellant asking him to show cause before June 26,why in view of the non compliance with the notices dated June 6 and 19, the sale should not be cancelled and the deposits already made should not be forfeited to the government.
The notice was served on his advocate on June 25 at 7.40 p.m.
On June 26, the.
appellant submitted a petition to the divisional commissioner stating that he had complied with the terms of r. 19 and the circular, that abrupt cancellation of the sale would result in irreparable injury and that in any event the time to deposit the balance two, months ' rental be extended for a reasonable time.
By an order dated June 26, (exhibit J), the divisional commissioner rejected the application for extension of time and cancelled the sale starting that (1) the appellant did not "at one& ' apply in writing, for licences in accordance with r. 19(1); (2) though he deposited two months ' rent as required by r. 19 (2), he did not file a statement of his immovable properties in accordance with r. 19(1); and should therefore be, considered as a person of doubtful solvency; (3) he was, therefore, required to deposit another 2 months ' rent under r. 19 (3) (i) and to furnish securities for six months ' rental or surety under r. 1 9 ( 3 ) (ii) and (iii) ; (4) he failed to comply with r. 19 in spite of notices dated June 6 and ' June 19; (5) the circular issued by the excise commissioner was opposed to r. 19 and could not be acted upon; (6) that even under the circular he was required to give two months ' collateral security in addition to 4 months ' cash deposit if he was a person, of doubtful solvency; and (7) that the sale conducting,officer has no power to extend the time for compliance with the formalities. 18 On June 28, the appellant filed writ petition No. 1889 of 1968 against the State of Mysore and others in the High ,Court of Mysore for quashing the order dated June 26, (exhibit Jr) and for the grant of licences to him to vend liquors in the combined groups of shops in Raichur and Gulbarga ,districts and for other reliefs.
The appellant submitted that (1) he had complied with the rules read with the cir cular; (2) he did not file any statement of his immovable properties under r. 19(1) as he had immovable properties in Andhra Pradesh; (3) as there was no inquiry nor, finding by any tahsildar ,that he was of doubtful solvency r. 19(3) was not attracted; (4) ,the divisional commissioner, Gulbarga, was not competent to ask for deposits and security under r. 19(3), nor was he competent to pass an order cancelling the sale; and (5) r. 19(3) was violative of articles 14 and 19 of the Constitution.
On June 28, the High Court admitted the writ petition and ,directed the state government to stay further proceedings and to issue licences to the appellant.
Subsequently the High Court ,confirmed the stay order on condition that the appellant would deposit another two months ' rent.
The appellant deposited about Rs. 20,00,000/ in accordance with the order.
On June 30, the divisional commissioner granted licences to him.
On July 1, he commenced his business in all the 1168 shops.
Thereafter he ,duly deposited about Rs. 30,00,000/ on account of rent for the months of July, August and September.
The state government, the excise commissioner and the divisional commissioner filed separate affidavits disputing the appellant 's contentions.
The rival tenderer, K. V. Niranjan was added as respondent No. 4 in W.P. No. 1889 of 1968 on his own application under an order of the High Court dated July 7.
K. V. Niranjan filed an affidavit stating that the appellant was a benamidar for other persons and the acceptance of his tender was forbidden by r. 12.
K. V. Niranjan also filed W.P. No. 2088 of 1968 for quashing the orders of the divisional commissioner dated May 28, and June 4, whereby the appellant 's tender was accepted and for a mandamus directing the acceptance of his next highest tender under r. 17(4).
The two writ petitions were heard together and were dismissed by the High Court by a common judgment delivered on September 17.
The High Court held that (1) the appellant did not comply with the mandatory requirements of r. 19; (2) r. 19(3) was not ultra vires the rule making power under section 71 nor violative of articles 14 and 19, and the appellant was estopped from challenging it; (3) the circular of the excise commissioner could not modify r. 19; the appellant could not rely on the circular as he came to know of it long after the sale, nor had he complied with its terms by depositing the entire four months rent before 19 June 12;(4) the appellant was a benamidar for other person or persons and in view of r. 12 was incompetent to bid and (5) the, order dated June 26 (exhibit J) was valid.
On these findings the High Court dismissed W.P. No. 1889 of 1968.
With regard to W.P. No. 2085 of 1968 the High Court said that as the sale to the appellant had been cancelled by exhibit J, it was not necessary to set aside the order accepting and confirming his bid.
The High Court held that under r. 17 (4) it was not obligatory on the officer conducting the sale to accept the next highest offer of respondent No. 4.
The High Court, however, said "in the circumstances of the case, it is necessary to observe that the authorities concerned will consider the advisability of accepting the bid of the fourth respondent, subject to his complying with all the requirements of the Act and the Rules.
" With these observations the High Court dismissed W.P. No. 2085 of 1968.
By a telegram dated September 18, the excise commissioner instructed the divisional commissioner, Gulbarga, to direct the tahsildars of Raichur and Gulbarga to issue licences to respondent No. 4 on his complying with certain conditions.
On the same date licences were issued to respondent No. 4.
On September 19, the High Court dismissed an application for stay of operation of its order dated September 17, and on the same day granted to the appellant a certificate under article 1 3 3 ( 1 ) (b) of the Constitution.
On September 25, the appellant filed a stay application in this Court.
On September 27, the Court passed an order restraining the respondents from forfeiting the deposits made by the appellant.
It is convenient at this stage to refer to the relevant provisions of the Mysore Excise Act, 1965 and the Mysore Excise (Disposal of Privileges of Retail Vend of Liquors) Rules, 1967.
Section 3(1) of the Act provides that the excise commissioner, "shall be the chief controlling authority in all matters connected with the administration of this Act." Section 15(1) provides that "no intoxicant shall be sold except under the authority and subject to the terms and conditions of a licence granted in that behalf." Under section 15 (2) a licence for sale can be granted (a) by the deputy commissioner if the sale is within a district or (b) by the excise commissioner if the sale is in more than one districts Section 17 ( 1 ) (b) empowers the state government to lease to any person, on such conditions and for such period as it thinks fit the exclusive or other right of selling by the wholesale or by retail any Indian liquors within any specified area.
Contravention of the Act or any Rules made thereunder is punishable under section 32.
Section 71 empowers the state government to make rules.
Rule 3 of the Mysore Excise (Disposal of Privileges of Retail Vend of Liquors) Rules, 1967 provides that the right of retail vend of liquors shall 20 be disposed of by tender or by auction or by tender cum auction.
The auction is conducted by the deputy commissioner or the divisional commissioner under r. 5 and the tender has to be made to them under r. 7 (1).
The tenderer is required by r. 7 (f ) to deposit as, earnest money an amount equal to 1/4 of the shop rental of the previous year of the shop or groups of shops.
The appellant complied with the requirement of r. 7 (f ).
Rule 10 requires an intending bidder or tenderer to furnish a certificate of his solvency or two sureties having similar certificates or bank guarantee or cash deposit to cover four times the earnest money fixed under rule 7(f).
It is not disputed that the appellant made sufficient cash deposits in compliance with r. 10.
Rule 12 read & : "Benami bids not allowed.
No person except a power of attorney holder shall be entitled to bid for another person.
" The sale to the appellant was not cancelled on the ground that he bid for another person.
Rule 17 regulates the procedure at sales.
Rule 17(1) empowers, the officer conducting the auction to accept the highest offer.
The acceptance is subject to the condition of confirmation by the deputy commissioner or by the divisional commissioner.
The confirmation is effective unless revised by the excise commissioner or the government.
Rule 17(2) empowers the excise commissioner or the government to revise the order of confirmation.
Rule 17(4) provides that if the officer conducting the sale rejects the highest bid or offer, he may either accept the next highest bid or offer or re sell the shop.
Rule 17 (5) requires the person whose bid is accepted to make a further deposit which together with the earnest money would make up one month 's rent.
The appellant made the deposit required by r. 17(5).
His bid was accepted and was later confirmed by the divisional commissioner.
Neither the excise commissioner nor the state government passed any order under r. 17(2) revising the decision confirming the acceptance of his bid.
Rule 19 provides as follows : "19 Successful bidder to apply for licence: Every person to whom the right of retail vend of liquors is sold or whose tender in respect thereof has been accepted under these rules and who has made deposits as hereinbefore provided shall (1) at once apply in writing for licence for such shop confirmed in his name and within a week thereafter furnish to the Tahsildar the, details of boundaries of the site selected by him for the location of the shop and a statement in the prescribed form annexed to the notification showing details of the immovable property possessed by him or in which he has an interest together with accurate and full details of encumbrances, if any, thereon; 22 (5) The purchaser shall get the bond and the mortgage deed registered under the Indian at his expense.
(6) The purchaser or his surety shall produce an encumbrance certificate in cases where immovable property is mortgaged to the Governor of Mysore.
" It is not alleged that the appellant did not furnish the details of the shop sites as required by r. 19 sub.
r. (1) within 15 days of the date of the confirmation of the sale.
The appellant made a deposit of two months rent as required by r. 19 sub r.
The appellant did not furnish a statement of immovable properties under r. 19 sub r.
(1) nor did not he furnish security or sureties under r. 19 sub r.
It is also alleged that he did not apply for licences at once as required by r. 19 sub r.
Rule 20(2) provides : "On failure to comply with the provisions of rr.
17 and 19 the deposits already made shall be forfeited and the right of retail vend of liquors in such shop or groups disposed of in such manner under these rules, as the Excise Commissioner may direct".
No order was passed by the excise commissioner under r. 20(2).
In our opinion, the provision of r. 19sub.
r.(1) requiring the successful bidder to furnish a statement of his properties to the Tahsildar and the provisions of r. 19 sub rr.
(3) and (4) do not apply where the shops in respect of which the right of retail vend is sold is situated in more than one tahsil.
The opening part of r. 19 sub r.(1) requires the purchaser to furnish to "the tahsildar" the location of the shops and the boundaries of the shop sites.
The expression "the tahsildar" is not defined, but it is reasonable to think that the details regarding the shops should be furnished to the tahsildar within whose tahsil the shops are situated.
If the shops are situated in more than one tahsil, the details can be furnished to several tahsildars.
But it is not possible to give effect to the last part of sub rule (1) and the provisions of sub rr.
(3) and (4) in cases where the shops are situated in more than one tahsil.
The statement of immovable properties under the last part of sub r.
(1 ) can be furnished to, only one tahsildar so that he can peruse the same and on such perusal or on independent inquiry ascertain under sub r.
(3) whether or not the purchaser is of doubtful solvency and satisfy himself under sub r.
(4)whether or not the value of the immovable properties tendered as security is adequate.
Sub rr.
(3) and (4) do not contemplate findings by more than one tahsildar nor do they provide any machinery for resolving the conflict of opinion, if any, between two or more tahsildars.
In our opinion, the last part of sub r.
(1) and the provisions of sub rr.
(3) and (4) do not apply where the shops are situated in two or more tahsils.
23 The right of retail vend sold to the appellant is in respect of shops situated in 19 Tahsils in the districts of Raichur and Gulbarga Consequently, those provisions were not attracted to this sale and the appellant was not required to comply with those provisions.
The divisional commissioner, Gulbarga, could not record a finding under r. 19 sub r.
(3) that the purchaser was of doubtful solvency.
Even a tahsildar could not record such a finding without making an independent inquiry where no statement regarding.
immovable properties was furnished under sub rule (1).
No independent inquiry under sub r.
(3) was made by any tahsildar For this reason also the appellant cannot be regarded as a person of doubtful solvency and he was therefore not required to comply with the provisions of sub r.
The appellant has so far deposited about Rs. 90,00,000/ and it is impossible to believe that he is a person of doubtful, solvency.
The remaining charge is that the appellant did not "at once" ' apply for licences.
Rule 20(2) provides for the forfeiture of the deposits on failure to comply with the provisions of r. 19.
Under the Mysore Excise Licences (General Conditions) Rules, 1967 a licensee is required to commence his business on July 1.
The purpose of the Act and the Rules is achieved if the application for licence is made within sufficient time so as to enable the issue of licences before July 1.
Having regard to the object of the Act and the Rules the expression "at once" in r. 19 sub.
(1) means within a reasonable time before July 1.
It could not have, been intended that the deposits would be forfeited where the purchaser applies for licence within a reasonable time.
The appellant sufficiently complied with r. 19 sub r.
(1) by applying under exhibit B, to the excise commissioner for permission to obtain licences and by applying to the divisional commissioner on June 18 for the issue of licences.
The divisional commissioner, Gulbarga was not competent to pass the impugned order (Ex, J) cancelling the sale.
Only the excise commissioner or the state government could under r. 17(2) revise his previous order confirming the sale and on such revision cancel the sale.
The divisional commissioner, Gulbarga was not authorised by r. 17(2) to revise his own order or to cancel it.
In hi ,, notice dated June 19, the divisional commissioner, Gulbarga, stated that he would take action under r. 20(2).
In his notice dated June 25, he asked the appellant to show cause why the sale should not be cancelled and why the deposits already made should not be forfeited to the government.
But he did not pass any order forfeiting the deposits.
Nor was he competent to pass any order under r. 20(2).
Only the excise commissioner could pass such an order.
24 It follows that the High Court was in error in holding that the appellant committed breaches of r. 19.
The finding of the divisional commissioner, Gulbarga, that the appellant committed such breaches is erroneous, nor was he competent to record the finding or to pass an order cancelling the sale.
In view of this conclusion it is not necessary to consider whether r. 19 sub r.
(3) offends articles 14 and 19 of the Constitution and we express no opinion on the question.
We cannot agree with the proposition that the appellant is estopped from challenging the constitutionality and vires of the sub rule.
It is true that .r.
24 provides that the purchaser shall be bound by all the rules.
But if r. 19 sub r.
(3) offends articles 14 and 19 it is non est and there can be no question of the appellant being bound by a rule which does not exist.
Though we express no opinion on the vires ,of the sub rule, we must observe that r. 19 is clumsily drafted, its import is not clear, its tight time schedule works hardship and its ,procedure is cumbersome.
The government should immediately ,consider the question of re drafting r. 19.
It may be noted that Mr. Narasaraju conceded that r. 19 is not beyond the rule making powers of the state government.
The appellant relied on the circular No. EXE.1.1575/67 (exhibit E) dated December 12, 1967.
Exhibit E is a letter from 'the excise commissioner to the deputy commissioner, Bangalore, ,,on the subject of securities to be furnished by the excise contractors.
The letter stated that the procedure of r. 19 was number some and not clear, that several deputy commissioners sought clarifications on 'the subject and that the state government had been moved to clarify and simplify the matter.
The excise commissioner directed that pending receipt of the government order the following procedure should be followed : In addition to obtaining two months ' cash deposits, (1) two months cash security might be accepted and in the absence of cash security four months ' collateral security might be insisted; (2) if the deputy commissioner/tahsildar was doubtful about the solvency of the contractor he could insist on six months ' collateral security and (3) while accepting the collateral securities care should be taken to see that "the contractor executed the necessary mortgage bond.
Admittedly, similar instructions were issued to other deputy commissioners and were enforced in several districts.
There is a dispute on the ,question whether the circular was sent to the districts of Gulbarga and Raichur.
In so far as the circular attempted to modify r. 19 it was in effective.
The excise commissioner, had no power to abrogate or modify a rule framed under section 71.
On behalf of the appellant it was argued that as the chief controlling authority the ,excise commissioner could frame regulations under section 3 read with r. 24 and could issue general instructions on the subject of taking 25 security in cases not covered by r. 19.
We express no opinion on this question, as the government has already withdrawn the circular.
But we must observe that relying on this circular the appellant deposited two months ' rent as required by the circular in addition to the two months ' rent as required by r. 19 sub r.
(2) and that such deposits were duly made within 15 days from the date of the sale.
However, it is not necessary for the appellant to rely on the terms of the circular.
He has complied with the provisions of r. 19 and the sale in his favour cannot be cancelled.
On behalf of respondent No. 4 it is argued that the appellant bought the right of retail vend as benamidar for some other person, that his benami bid was opposed to r. 12 and could not be accepted and that as the sale of liquor by the real buyer without a licence in his favour was illegal in view of sections 15 and 26, the appellant was not entitled to any relief in view of the decision in Venkata Subbayya vs Attar Sheik Mastan(1).
The onus is upon the respondent to prove that the appellant made a benami purchase.
It appears that the appellant is a retired inspector drawing a pension of about Rs. 75/ per month.
He is not an income tax or a wealth tax assessee, He does not own any property in Mysore State.
The appellant says that he owns immovable properties in Andhra Pradesh but he did not file the title deeds in respect of them.
However, the appellant was in possession of a large amount of ready cash.
Before June 25, he deposited about Rs. 40 lakhs and thereafter deposited about Rs. 50 lakhs.
There can be no doubt that the appellant has the backing of powerful financiers.
There is no specific charge that some named person is the real purchaser.
From the materials on the record it is not possible to record a finding that the appellant is a benamidar and that that some other person is the real purchaser.
The purchase is not illegal merely because the appellant obtained the necessary funds from some financiers.
The government never alleged that the appellant 's bid was a benami bid and opposed to r. 12.
His bid was accepted and such acceptance was subsequently confirmed.
Under r. 17(1) the confirmation is effective until revised by the appropriate authority.
It is neither alleged nor proved that sonic person other than the appellant had been managing the shops and selling liquor in contravention of section 15.
Respondent No.4 has failed to establish contravention of either r. 12 or section 15.
The High Court was in error in holding that the appellants bid was opposed to r. 12.
Having regard to the fact that the appellant had already deposited about Rs. 40 lakhs the divisional commissioner, Gulbarga, acted rather precipitately and harshly in cancelling the sale.
(1) A.I.R. 1949 Mad. 252.
Sup CI/69 3 26 For the reasons already given ,the order of cancellation (Ex.J) is invalid.
The order must be set aside and a writ of mandamus must issue for the grant of licences to the appellant.
Some complication arises out of the fact that the licences have been granted to respondent No. 4 after the disposal of the, writ petitions by the High Court.
Licences cannot be given to both the appellant and respondent No. 4 for retail vend of liquors in respect of the same groups of shops.
In order to give effect to our order for the issue of licences in favour of the appellant it is necessary to give the further direction that the licences issued to respondent No. 4 should be cancelled.
We can give this direction as respondent No. 4 is a party to this appeal.
While holding that r. 17 sub r.
(4) did not compel the officer conducting the sale to accept the next highest offer of respondent No. 4 the High Court observed that the authorities concerned should consider the advisibility of accepting his bid.
This observation is not in accordance with law and has given rise to unnecessary complications.
Rule 17(4) provides that "if the officer conducting the sale rejects the highest bid or offer, he may either accept the next highest bid or offer or re sell the shop.
" The sub rule cannot be invoked if the officer conducting the sale has accepted the highest offer.
In the present case, the officer accepted the appellant 's highest offer and later confirmed it.
The confirmation is still effective under r. 17(1).
If for some reason the confirmation is subsequently revised or set aside, the officer cannot act under r. 17(4).
In such a case there must be a fresh disposal of the right of retail vend of liquor in accordance with the Rules.
It follows that the bid of respondent No. 4 could not be accepted under r. 17(4) after the disposal of the writ petitions on September 19.
It is rather surprising that the Government acted so hastily and issued licences to respondent No. 4 on or about September 18.
It is not quite clear how licences in respect of 1168 shops could be issued on a single day.
The effect of this precipitate action on, the part of the government was that the appellant could not on the next day obtain a stay of the operation of the High Court 's order.
There is ground for suspecting that the government was favouring respondent No. 4.
In the result the appeal is allowed with costs in this Court and in the High Court.
The order passed by the High Court is set aside.
Writ Petition No. 1889 of 1968 is allowed.
The order dated June 26, 1968 (exhibit J) is set aside.
Respondents 1 and 2 ;ire directed to grant immediately licences to the appellant to vend liquors in the combined groups of shops in Raichur and 27 Gulbarga districts for the remaining period of the year 1968 1969.
Respondents 1 and 2 are also directed to cancel forthwith the licences issued to respondent No. 4 in respect of the aforesaid groups of shops.
Y.P. Appeal allowed. | The appellant was the highest bidder for the exclusive privilege of retail vend of toddy and arrack for the year 1968 69, in a group of 1168 shops situated in 19 tehsils in the districts of Raichur and Gulbarga.
He made the deposits of money required under rr. 7(f) 'and 10 of the Mysore Excise (Disposal of Privileges of Retail Vend of Liquors) Rules, 1967 made under section 71 of the Mysore Excise Act, 1965.
The highest bid of the appellant was accepted and confirmed by the Divisional Commissioner of Gulbarga under r. 17(1) on June 4, 1968.
Thereafter, the appellant made further deposits required by rr.
17(5) and 19(2).
In all he deposited about Rs. 40 lakhs by June 15.
On June 18 he applied to the Divisional Commissioner for the issue licence.
He however, did not comply with r. 19(1) and (3) which required that a statement of immovable Properties should be furnished and that he should furnish security or sureties, respectively.
The Divisional Commissioner Gulbarga issued a notice to the appellant to show cause why the sale should not be cancelled and the deposits already made forfeited under r. 20(2).
The appellant prayed for two months time for compliance with the requirements of r. 19, but the Divisional Commissioner rejected the application and cancelled the sale.
He did not pass any order forfeiting the deposits.
The appellant filed a writ petition in the High Court for quashing the order and under directions of the Court deposited another Rs. 50 lakhs.
The 4th respondent, who was the next highest bidder applied to be made a party to the petition and contended that the appellant was a benamidar for other persons and so acceptance of his tender was forbidden by r. 12.
The High Court dismissed the writ petition holding (1) that the appellant did not comply with the mandatory requirements of r. 19 in that he did not furnish the statements and apply 'at once ' for licences as required by r. 19(1); (2) the appellant was a benamidar; and (3) the authorities should consider the advisability of accepting the bid of the 4th respondent.
On the very next day after the judgment of the High Court, the respondent State issued licences in respect of 1168 shops to the 4th respondent.
In appeal to this Court.
HELD : The licences issued to the 4th respondent should be cancelled and a writ of mandamus should issue for the grant of licences to the appellant.
[26 A] 15 (1)(a) The opening part of r. 19(4) requires the purchaser to furnish to 'the tehsildar ' the location of shops and the boundaries of the shop sites that is to the tahsildar within whose tehsil the shops are situated.
If the shops are situated in more than one tehsil, the details can be fur nished to the several tahsildars, but in such a case it is not possible to give effect to the last part of the sub rule and also to the provisions of sub rr.
(3) and (4).
The statement of immovable properties under the last part of sub r.
(1) can be furnished to only one tahsildar so that he can peruse the same; and on such perusal or on independent inquiry ascertain under sub r.
(3) whether or not purchaser is of doubtful solvency and satisfy himself under sub r.
(4) whether or not the value of the immovable property tendered as security is adequate.
Sub rr.
(3) and (4) do not contemplate findings by more than one tahsildar nor do they provide any machinery for resolving the conflict of opinion, if any, between two or more tahsildars.
The last part of sub r.
(1) and sub rr.
(3) and (4) do not apply where the shops are situated in two or more tahsils.
Consequently, those provisions were not attracted to the sale in the present case and the appellant was not required to comply with those provisions.
[22 E] (b) In the absence of 'an independent enquiry under sub r.
(3), the appellant could not be regarded as a person of doubtful solvency.
(c) Under the Mysore Excise Licences (General Conditions) Rules, 1967, a licencee is required to commence his business on July 1.
The expression 'at once ' in r. 19(1), means within a reasonable time before July 1.
In the present case, the appellant sufficiently complied with subrule.
[23 D E] (d) Under r. 17(2) it is only the excise commissioner or the State Government that could revise the order of the divisional commissioner confirming a sale and the divisional commissioner himself was not authorised to revise his, own order or cancel it.
[23 G] Therefore, the High Court was in error in holding that the appellant committed breaches of r. 19.
[Rule 19 is clumsily drafted, its import is not clear, its tight time schedule works hard ship and its procedure is cumbersome.
The Government should immediately consider the question of redrafting the rule.] [24 C D] (2) The appellant was a retired inspector drawing a pension of about Rs. 75 per month and, is not an income tax or wealth tax assessee.
He evidently has the backing of powerful financiers, but the purchase is not illegal merely because the appellant obtained necessary funds from some financiers.
The onus of proving that appellant was a benamidar was on the 4th respondent and from the materials on record it is not possible to hold that he is a benamidar for some other person.
[25 D] (3) Under r. 17(4), it is only when the highest bid is rejected that the next highest bid may be considered.
Where there is an acceptance of the highest offer and 'if for some reason it is revised, r. 17(4) cannot be invoked.
In such a case there must be a fresh disposal of the right of retail vend of liquor in accordance with the Rules.
Therefore, the High Court erred in observing that the 'authorities should consider the advisability of accepting the 4th respondents bid.
[26 E] |
minal Appeal No. 51 of 1967.
Appeal by special leave from the judgment and order dated October 3, 1966 of the Bombay High Court, Nagpur Bench in Criminal Revision Application No. 168 of 1966.
R. K. Garg, section C. Agarwala, G. V. Kalikar, section K. Dhingra and M. section Gupta, for the appellants.
W. section Barlingay and A. G. Ratnaparkhi, for respondent No. 1.
H. R. Khanna and section P. Nayar, for respondent No. 2.
The Judgment of the Court was delivered by Shah, J.
The Nagpur District Land Development Bank Ltd. is registered as a society under the Maharashtra Co oPerative Societies Act, 1960. 'One Narayan Tanbaji Murkute applied for membership of the Bank as a "non borrowing member".
At a meeting of the Bank held on June 30, 1964, the application of Murkute and of 94 others were granted and they were enrolled as members.
But in the list of members entitled to take part in the General Meeting dated June 30, 1964 the names of Murkute and others were not included.
Murkute and others then applied to the Registrar Co operative Societies for an order declaring that they were entitled to participate in the election of office bearers and for an injunction restraining the President and the Secretary from holding the 187 annual General Meeting.
The Registrar referred the dispute for adjudication under section 93 of the Maharashtra Co operative Societies Act, 1960, to H. V. Kulkarni, his nominee.
The nominee decided the dispute on May 7, 1965 and held that Murkute and other applicants were members of the Bank.
In the proceeding before the nominee certain documents including the minutes book of the Bank were produced.
It is claimed by Murkute that those 'books were fabricated by the President and the Secretary with a view to make it appear that Murkute and other persons were never elected members of the Bank.
On August 7, 1965, Murkute filed a complaint in the Court of the Judicial Magistrate, First Class, Nagpur, charging the President and Secretary of the Bank with committing offences under sections 465 and 471 I.P. Code.
It was alleged in the complaint that the two accused had dishonestly and fraudulently introduced a clause in Resolution No. 3 appearing in the minutes book with the intention of causing it to be believed that the clause was part of the original.
Resolution passed by the Board of Directors in the meeting held on June 30, 1964, whereas it was known to them that at that meeting no such clause was passed.
The two accused raised an objection that the Magistrate had no jurisdiction to take cognizance of the complaint without the previous sanction of the Registrar of Co operative Societies under section 148(3) of the Maharashtra Co operative Societies Act, 1960.
The Trial Magistrate rejected the contention.
The order was confirmed by the Court of Session and the High Court of Bombay.
In this Court counsel for the accused raised two contentions that (1) that, the nominee of the Registrar appointed under section 95 of the Maharashtra Co operative Societies Act, 1960, was a "court" within the meaning of section 195 Code of Criminal Procedure, and a complaint for offences under sections 465 and 471 I.P. Code alleged to have been committed by a party to any proceeding in respect of a document produced or given in evidence in such proceeding, cannot be entertained except on a complaint in writing of such court, or of a court to which it is subordinate; and (2) that offences charged in the complaint fell within the description of the offence under section 146(p) of the Maharashtra Co operative Societies Act, 1960, and without the sanction of the Registrar the complaint was not maintainable.
Section 195 Code of Criminal Procedure insofar as it is relevant provides : "(1) No Court shall take cognizance(a) (a) (b) 188 (c) of any offence described in section 463 or punishable under section 471 .
when such offence is alleged to have been committed by a party to any proceeding in any Court in respect of a document produced or given in evidence in such proceeding, except on the complaint in writing of such court, or of some other Court to which such Court is subordinate.
(2) In clauses (b) and (c) of sub section '(1), the term "Court" includes a Civil, Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877." Murkute complained that the President and the Secretary of the Bank who were parties to the proceeding before the nominee of the Registrar had committed offences under sections 465 & 471 I.P. Code in respect of documents produced or given in evidence at the trial.
If the Registrar 's nominee is a Court within the meaning of section 195 Code of Criminal Procedure the Magistrate could not take cognizance except on the complaint in writing by the Registrar 's nominee or of some court to which he was subordinate.
To determine whether the Registrar 's nominee is a court, it is necessary to refer to the relevant provisions of the Maharashtra Co operative Societies Act, 1960, relating to the functions of the nominee and the powers with which he is invested, counsel for the appellants urges that by the Maharashtra Co operative Societies Act the power of the Civil Court to entertain disputes with regard to certain matters concerning cooperative societies is expressly excluded from the jurisdiction of the Civil Court, and the Registrar or his nominee is alone competent to determine those questions; thereby the Registrar and his nominee are invested with the judicial power of the State and they are on that account "courts" within the meaning of section 195 of the Code of Criminal Procedure.
Section 2(2) of the Maharashtra Co operative Societies Act, 1960, defines "arbitrator" as meaning "a person appointed under this Act to decide disputes referred to him by the Registrar and includes the Registrar 's nominee or board of nominees.
" Section 91 and the following sections which occur in Ch.
IX relate to disputes and arbitration.
By section 91, insofar as it is material, it is provided : "(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, election of the office bearers, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute. . . to the Registrar, if both the parties hereto are one or other of the following 189 (a) (b) a member, past member or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society.
(c) (d) (e) (2) When any question arises whether for the purpose of the foregoing subsections matter referred to, for decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final.
(3) Save as otherwise provided under sub section (3) of section 93 no Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub section (1).
" Section 93 provides : "(1) If the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of section 91, the Registrar shall, subject to the rules, decide the dispute himself, or refer it for disposal to a nominee, or a board of nominees, appointed by the Registrar.
(2) Where any dispute is referred under the foregoing sub section, for decision to the Registrar 's nominee or board of nominees, the Registrar may at any time, for reasons to be recorded in writing withdraw such dispute from his nominee or board of nominees, and may decide the dispute himself, or refer it again for decision to any other nominee, or board of nominees, appointed by him.
(3) Notwithstanding anything contained in section 91 the Registrar may, if he thinks fit, suspend proceedings in regard to any dispute, if the question at issue between a society and a claimant or between different claimants, is one involving complicated questions of law and fact, until the question has been tried by a regular suit instituted by one of the parties or by the society.
If any such suit is not instituted within two months from the Registrar 's order suspending proceedings, the Registrar shall take action as is provided in subsection 190 Section 94 provides for the procedure of settlement of disputes and power of the Registrar, his nominee or the board of nominees.
It provides, insofar as it is material : "(1) The Registrar, or his nominee or board of nominees, hearing a dispute under the last preceding section shall hear the dispute in the manner prescribed, and shall have power to summon and enforce attendance of witnesses including the parties interested or any of them and to compel them to give evidence on oath, affirmation or affidavit and to compel the production of documents by the same means and as far as possible in the same manner, as is provided in the case of a Civil Court by the Code of Civil Procedure, 1908.
(2) Except with the permission of the Registrar or his nominee or board of nominees, as the case may be, no party shall be represented at the hearing of a dispute by a legal practitioner.
" Sub section (3) of section 94 authorises the Registrar, his nominee or the board of nominees to join or substitute new parties.
Section 95 authorises the Registrar or his nominee or board of nominees to pass an order of attachment and other interlocutory orders.
Section 96 provides "When a dispute is referred to arbitration the Registrar or his nominee or board of nominees may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute, on the expenses incurred by the parties to the dispute in connection with the proceedings, and fees and expenses payable to the Registrar or his nominee or, as the case may be, board of nominees.
Such an award shall not be invalid merely on the ground that it was made after the expiry of the period fixed for deciding the dispute by the Registrar and shall, subject to appeal or review of revision, be binding on the parties to the dispute.
" Section 97 provides "Any party aggrieved by any decision of the Registrar or his nominee or board of nominees under the last preceding section, or an order passed under section 95 may,. . . appeal to the Tribunal.
Section 98 provides that every order passed by the Registrar or his nominee or board of nominees or in appeal therefrom shall, it not carried out, on a certificate signed by the Registrar, be deemed to be a decree of a civil court, and shall be executed in 191 the same manner as a decree of such court or be executed according to the law and under the rules for the time being in force for the recovery of arrears of land revenue.
By section 99 a private transfer or delivery of, or encumbrance or charge on, property made or created after the issue of the certificate of the Registrar under section 98 shall be null and void as against the society on whose application the certificate was issued.
Jurisdiction of the Civil Court by section 91(3) to entertain a suit in respect of any dispute referred to in sub section
(1) of section 91 is expressly excluded and the dispute is required by law to be referred to the Registrar or his nominee.
Against the decision of the Registrar 's nominee an appeal lies under section 97 and the order made for payment of money is enforceable as a decree of the Civil Court.
The Registrar or his nominee called upon to decide the dispute are bound to hear it in the manner prescribed and they have power to summon and enforce attendance of witnesses and to compel them to give evidence on oath, affirmation or affidavit and to compel production of documents.
The effect of these provisions, according to counsel for the Appellants, is that the judicial power of the State to deal with and dispose of disputes of a civil nature which fall within the description of section 91(1) is vested in the Registrar 's nominee and he is on that account made a "court" within the normal connotation of the term.
Section 195(2) of the Code of Criminal Procedure enacts that the term "court" includes a Civil, Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877.
The expression "court" is not restricted to courts, Civil, Revenue or Criminal; it includes other tribunals.
The expression "court" is not defined in the Code of Criminal Procedure.
Under section 3 of the Indian Evidence Act "Court" is defined as including "all Judges and Magistrates, and all persons, except arbitrators, legally authorised to take evidence".
But this definition is devised for the purpose of the Evidence Act and will riot necessarily apply to the Code of Criminal Procedure.
The expression "Court of Justice" is defined in the Indian Penal Code by section 20 as denoting "a Judge who is empowered by law to act judicially as a body, when such Judge or body of Judges is acting judicially".
That again is not a definition of the expression "Court" as used in the Code of Criminal Procedure.
The expression "Court" in ordinary parlance is a generic expression and in the context in which it occurs may mean a "body or organization" invested with power, authority or dignity.
In Halsbury 's Laws of England, 3rd Edn., Vol. 9, article 809 at p. 342 it is stated : "Originally the term "court" meant, among other meanings, the Sovereign 's place; it has acquired the 192 meaning of the place where justice is administered and, further, has come to mean the persons who exercise judicial functions under authority derived ' either immediately or mediately from the Sovereign.
All tribunals, however, are not courts, in the sense in which the term is here employed, namely, to denote such tribunals, as exercise jurisdiction over persons by reasons of the sanction of the law, and not merely by reason of voluntary submission to their jurisdiction, Thus, arbitrators, committees of clubs, and the like, although they may be tribunals exercising judicial functions, are not "Courts" in this sense of that term.
On the other hand, a tribunal may be a court "in the strict sense of the term although the chief part of its duties is not judicial.
Parliament is a court.
Its duties are mainly deliberative and legislative : the judicial duties are only part of its functions.
" In article 810 it is stated "In determining whether a tribunal is a judicial body the facts that it has been appointed by a nonjudicial authority, that it has no power to administer an oath, that the chairman has a casting vote, and that third parties have power to intervene are immaterial, especially if the statute setting it up prescribes a penalty for making false statements ; elements to be considered are (1) the requirement for a public hearing, subject to a power to exclude the public in a proper case, and (2) a provision that a member of the tribunal shall not take part in any decision in which he is personally interested, or unless he has been present throughout the proceedings.
A tribunal is not necessarily a court in the strict sense of exercising judicial power because (1) it gives a final decision; (2) hears witnesses on oath; (3) two or more contending parties appear before it between whom it has to decide; (4) it gives decisions which effect the rights of subjects; (5) there is an appeal to a court; and (6) it is a body to which a matter is referred by another body.
Many bodies are not courts, although they have to decide questions, and in so doing have to act judicially, in the sense that the proceedings must be conducted with fairness and impartiality, such as the former assessment committees, the former court of referees which was constituted under the Unemployment Insurance Acts, the blenchers of the Inns of Court when considering the conduct of one of their members, the 193 Disciplinary Committee of the General Medical.
Council when considering questions affecting the conduct of a medical man, a trade union when exercising disciplinary jurisdiction over its members, or the chief officer of a force exercising discipline over members of the force.
" A body required to act judicially in the sense that its proceedings must be conducted with fairness and impartiality may not therefore necessarily be regarded as a court.
Counsel for the appellants however invited our attention to a number of decisions in support of his contention that wherever there is a dispute which is required to be resolved by a body invested with power by statute and the body has to act judicially it must be regarded as a court within the meaning of section 195 of the Code of Criminal Procedure.
Counsel asserted that every quasi judicial authority is a court within the meaning of section 195 (2) of the Code of Criminal Procedure.
The contention is inconsistent with a large body of authority of this Court to which we will presently refer.
By section 195 of the Code of Criminal Procedure, it is enacted that certain offences amounting to contempt of lawful authority of public servants i.e. offences falling under sections 172 to 188 I.P; Code, offences against public justice under sections 193, 194, 195, 196, 199, 200, 205, 206, 207, 208, 209, 210, 211 and 228, when such offences are alleged to have been committed in or in relation to, any proceeding in any Court, and offences described in section 463 or punishable under sections 471, 475 or 476, when such offences are alleged to have been committed by a party to any proceeding in any Court in respect of a document produced or given in evidence in such proceeding, cannot be taken cognizance of by any court, except in the first class of cases on a complaint in writing of the public servant concerned, and in the second and third class of cases on the complaint in writing of such Court or some other Court to which it is subordinate.
An offence ordinarily signifies a public wrong : it is an act or omission which is a crime against society : it may therefore be brought to the notice of the Court by any person, even if he is not personally aggrieved by the act or omission.
To that rule there are certain exceptions which are specified in sections 195, 196, 197, 198, 198A of the Code of Criminal Procedure and other special statutes.
Authority of courts to entertain complaints in respect of the offences so specified is barred in view of the special nature of the offence which vitally affect individuals only or public bodies and in the larger interest of society it is deemed expedient to exempt them from the general rule.
194 The nominee of the Registrar acting under section 96 performs the functions substantially of an arbitrator to whom a dispute is ,referred for adjudication.
The Registrar may appoint a single nominee or a board of nominees and may at any time, for reasons to be recorded in writing, withdraw such dispute from the nominee or 'board of nominees, and may decide the dispute himself, or refer it again for decision to another nominee, or board of nominees, appointed by him.
Under sub section
(3) of section 93 it is open to the Registrar to suspend proceedings in regard to any dispute, if the question at issue between a society and a claimant or between different claimants, is one involving complicated questions of law or fact.
The jurisdiction of the nominee or board of nominees arises by reason not of investment by statute, but by appointment made by the Registrar who exercises control over the proceeding.
The nominee therefore derives his authority from his appointment by the Registrar : the Registrar is entitled to withdraw his authority; and the Registrar may fix the time within which a dispute shall be disposed of : his adjudication is again called an award.
The nominee is even entitled to make a provision for the 'expenses payable to the Registrar or to himself.
It is true that the procedure of the nominee is assimilated to the procedure followed in the trial of a Civil proceeding.
The nominee has the power to summon witnesses, to compel them to produce documents and he is required to hear the dispute in the manner prescribed by the Code of Civil Procedure.
Thereby he is required to act judicially i.e. fairly and impartially : but the obligation to act judicially will not necessarily make him a court within the meaning of section 195 of the Code.
The position of a nominee of the Registrar is analogous to that of an arbitrator designated under a statutory arbitration to which the provisions of section 47 of the , apply.
The authorities to which our attention was invited by counsel for the appellants may now be considered.
It may be sufficient here to observe that the tests laid down by this Court in certain cases to be presently noticed make many of the cases relied upon of doubtful authority.
In Thadi Subbi Reddi vs Emperor(1) it was held by a single Judge of the Madras High Court that the Registrar before whom a Co operative Society files its suit, or its claim for enforcing a bond, is a "Court" within the meaning of section 195 of the Code of Criminal Procedure, for the Registrar to whom a dispute touching a debt due to a society by a member is referred has power to administer oaths, to require the attendance of all parties concerned and of witnesses, and to require the production of all books and documents relating to the matter in dispute, and the Registrar is required to give a decision in writing, and when it is given the decision may be enforced on application to the Civil Court having jurisdiction as if it were a decree of the Court.
2 00 deface, or secrete or attempts to secrete any document which is or purports to be a will, or an authority to adopt a son, or any valuable security, or mischief in respect of such document.
section 477A penalises falsification of accounts by a clerk, officer or servant or by a person employed in the capacity of a clerk, officer or servant.
The offence of forgery and its allied offences may be committed if a false document is made with intent to cause damage or injury to public or any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, (section 463).
In order to attract section 463 I.P. Code there must therefore, be making of a false document with the intention mentioned in that section.
By 464 it is provided : "A person is said to make a false document First.
Who dishonestly or fraudulently makes, signs, seals or executes a document or part of a document, or ,,makes any mark denoting the execution of a document, with the intention of causing it to be believed that such document or part of a document was made, signed, sealed or executed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed or executed, or at a time at which he knows that it was not made, signed, sealed or ,executed; or Secondly Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a, document in any material part thereof, after it has been made or executed either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document, knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or the nature of the alteration." Making of a false document by a person in all the three clauses must be done dishonestly or fraudulently and with the necessary intention or knowledge contemplated by the three clauses.
Section 146 of the Maharashtra Co operative Societies Act, 1960, does not make any such intention as is referred to in sections 463 and 464 I.P. Code an ingredient of the offence: it also renders a person who is merely privy to the destruction, mutilation, alteration, falsification or secreting or to the making of any false or 201 fraudulent entry in any register, book of account or document belonging to the society liable to be punished.
under section 146 (p) The offence may be committed under section 146 only by an officer or member past or present of the society.
Even destruction or secreting of a document or security is penalised under section 146 of the Act.
We are unable to accept the contention that these two sections section 146(p) of the Maharashtra Co operative Societies Act and section 465 P. Code, are intended to deal with the same offence.
It is true that certain acts may fall within both the sections.
For instance, tampering with or altering or falsifying any, register, book of account or security, or making any false or fraudulent, entry in the register, book of account or document belonging to the society, may when done with the requisite intention mention ed in section 464 read with section 463 I.P. Code be also an offence under section 146(p) of the Maharashtra Co operative Societies Act.
But that, in our judgment, is not a ground for holding 'that section 465 I.P. Code and the related offences were intended to be pro tanto repealed by the enactment of section 146(p) of the Maharashtra Cooperative Societies Act.
When the Indian Penal Code seeks to impose in respect of offences under As, 477 imprisonment which may extend to imprisonment for life, or with imprisonment upto a period of seven years for an offence under section 477A it would be difficult to hold that when committed by an officer or a member of a society the maximum punishment which can be imposed by virtue of section 146(p) would be three years rigorous imprisonment only.
This Court in Om Prakash Gupta vs State of Uttar Pradesh(1) held that the offences under section 409 I.P. Code and section 5(1)(c) of the Prevention of Corruption Act, are distinct and separate offences and section 409 I.P. Code is not repealed by section 5(1) (c) of the Prevention of Corruption Act.
In a recent judgment of this Court in T. section Balliah vs T. section Rengachari(2) we had occasion to consider whether section 177 I.P. Code was repealed by section 52 of the Indian Income tax Act.
It was pointed out that in considering the problem the Court must consider the true meaning and effect, of the two Acts, and unless there is repugnancy or inconsistency between the two enactments or that the two enactments cannot stand together they must be treated as cumulative.
It is clear from a perusal of section 146 (p) of the Maharashtra Co operative Societies Act, 1960, and sections 463 and 464 I.P. Code.
that they are two distinct offences which are capable of being (1) [1957] S.C.R.423.
7 Sup C 1/69 14 (2) ; 202 Committed with different intentions by different sets of persons and it, could not be contemplated that the Legislature of the State of Maharashtra intended to repeal pro tanto the provisions of section 465 I.P. Code by enactment of section 146 of the Maharashtra Co operative Societies Act.
It is unnecesary in the circumstances to consider the question whether the Maharashtra State Legislature was competent to repeal the provisions of section 465 I.P. Code.
The law relating to Co operative Societies may be enacted in exercise of the power under List II Entry 32 of the Seventh Schedule to the Constitution, but if section 146 is directly intended to trench upon a provision ,of the Indian Penal Code falling within List 11 Entry 1, sanction of the President under article 254(2) would apparently be necessary.
Both the contentions raised by counsel for the appellants fail.
The appeal is dismissed.
G.C. Appeal dismissed. | The Nagpur District Land Development Bank Ltd. was registered as a society under the Maharashtra Cooperative Societies Act, 1960.
There was dispute as to whether one 'M ' had been elected as a member of the Bank at a meeting of the Board of Directors.
The Registrar of Cooperative Societies referred the dispute to a nominee.
Certain documents including the minutes book of the Bank were produced before the nominee. 'M ' filed a complaint against the President and Secretary of the Bank charging them with offences under sections 465 and 471 I.P.C. for having forged the minute book and producing it before the nominee.
The two accused raised an objection that the magistrate had no jurisdiction to take cognizance of the complaint without the previous sanction of the Registrar of Cooperative Societies under section 148(3) of the Maharashtra Cooperative Bank Act, 1960.
The trial magistrate rejected the contention.
The order was confirmed by the Court of Session and the High Court Of Bombay.
In appeal before this Court the following contentions were urged on behalf of the accused appellants : (i) That the nominee of the Registrar appointed under section 95 of the Maharashtra Cooperative Societies Act, 1960, was a 'court ' within the meaning of section 195 of the Code of Criminal Procedure and a complaint for offences under sections 465 and 471 Indian Penal Code alleged to have be en committed by a party to any proceeding in respect of the document produced or given in evidence in such proceeding, cannot be entertained except on a complaint in writing of such court, or of a court to which it is subordinate, (ii) That the ingredients of the offence of forgery punishable under section 465 I.P. Code 'and of the offence under section 146(p) of the Maharashtra Cooperative Societies Act are the same, and the general provision is on that account pro tanto repealed, and in any event in view of section 148(3) of the Maharashtra Act no prosecution could be initiated in respect of the offences charged otherwise than with the sanction of the Registrar.
HELD : (i) The nominee exercising power to make an award under section 96 of the Maharashtra Cooperative Societies Act, 1960, derives his authority not from the statute but from investment by the Registrar in his individual discretion.
The power invested is liable to be suspended and may be withdrawn.
He is not entrusted the judicial power of the State : he is merely an arbitrator authorised within the limits of the power conferred to 'adjudicate upon the dispute referred to him.
He is not a court within the meaning of section 195 of the Code of Criminal Pro 'Sup.
CI/69 13 18 6 Thadi Subbi Reddi vs Emperor, , Velayuda Mudali & Anr.
vs Co operative Rural Credit Society & Ors., , Y, Mahabaleswarappa vs M. Gopalaswami Mudaliar, A.I.R. 1935 Mad. 673, Nand Lal Ganguli vs Khetra Mohan Ghose, I.L.R. , Jagannath Prasad vs State of Uttar Pradesh, ; , Lalji Haridas vs State of Maharashtra & Anr., ; , Shri Virindar Kumar Satyawadi vs State of Punjab, [1955] 2 S.C.R. 1013, Brajnandan Sinha vs Jyoti Narain, ; , Hari Pandurang & Anr.
vs Secretary of State for India in Council I.L.R. , Thakur Jugal Kishore Sinha vs Sitamarhi Central Co operative Bank Ltd. ; and Malabar Hill Co operative Housing Society Ltd. Bombay vs K. L. Gauba & Ors.
A.I.R. 1964 Bom.
147, considered.
(ii) Section 146(p) of the Maharashtra Cooperative Societies Act, 1960 and sections 463 and 464 I.P.C. are two distinct offences which are capable of being committed with different intentions by different sets of persons and it could not be contemplated that the Legislature of the State of Maharashtra intended to repeal pro tanto the provisions of section 465 I.P.C. by enactment of section 146 of the Maharashtra Cooperative Societies Act.
The prosecution in the present case not being under the Maharashtra Act sanction of the Registrar under section 148 thereof was not necessary.
[201 H 202 A] Om Prakash Gupta vs State of Uttar Pradesh, [1957] S.C.R. 423 and T. section Balliah vs T. section Rengachari, ; , applied. |
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